Summary:
California has some of the highest business costs in the nation. Its wage costs are high, workers' compensation rates have risen dramatically and its energy costs are 51 percent higher than other Western states.
It's time, panelists said, to do something about it — or put California's economic future further at risk.
Richard Riordan pointed to Sacramento as part of the problem. He said the California Legislature is polarized by radically liberal and conservative politicians, preventing compromise and moderate solutions from succeeding.
"We must elect moderates," he said. To do this, he supports nonpartisan primaries in which voters elect the person, not the party.
He called for a "revamping of government" to get rid of hundreds of anti-business rules and regulations coming out of the capital. As an example, Riordan cited a new decision by the Legislature that California would no longer comply with the national Uniform Building Code, but create its own code, a move that will cost the state billions of dollars, he said.
Ray Rossi said there are too many policies that interfere with investment. But while he bemoaned the pending expiration of the manufacturing tax credit in January 2004, he admitted that California has the best research tax credit in the country.
"There is no one silver bullet," Rossi said. The solution is a combination of many things.
Kellie Dodson said her company — a third-generation aerospace manufacturing firm — was under intense pressure to leave the state, both from her customers, whose believe it is too expensive to do business here, and other states, who constantly recruit the firm. Noting one benefit of doing business in California — an unparalleled workforce — she said that good companies should be rewarded.
"California is not being proactive about trying to keep small businesses here," she said.
Anthony Buzelli, a newcomer to California, focused on the state's advantages, among them its "can-do, attitude," high-quality, educated population, proximity to innovations and people who innovate, and universities. Despite infrastructure problems, Buzelli said the California environment is very strong.
He suggested, however, that an economic analysis of legislation would be useful for evaluating its long-term value.
Moderator Russell Goldsmith closed by suggesting that an economic impact report should accompany every piece of legislation. Legislators don't have that knowledge. He suggested that businesspeople need to help lawmakers, individually or as a group.
