2013-05-24 / Business

Keeping California open for business

State agency seeks ways to cut red tape
By Stephanie Guzman

Roger and Scotia Alves have owned and operated their car audio and electronic accessories business in Oxnard for 33 years but are thinking of moving their company out of state because of California’s high tax rates and government regulations.

“We want to stay in California,” said Scotia Alves of their company, Scosche Industries. “I’m a fifthgeneration Californian, but the writing on the wall is bad.”

Scosche Industries is a family-owned business that employs 150 to 200 people in Arkansas, China, Alabama and at its headquarters in Oxnard.

Alves and her husband have met with governors and economic development teams from Utah and Virginia, states which tout tax incentives, a cheaper housing market and lower cost-of-living expenses for employees. The couple also met with Texas Gov. Rick Perry when he visited Haas Automation in Oxnard earlier this year.

California lawmakers have made attempts to keep other states from poaching businesses.

Assemblymember Jeff Gorell and Lt. Gov. Gavin Newsom created the Gold Team, and Gov. Jerry Brown instituted the business and economic development agency GO-Biz.

Gold Team is a nonpartisan job-creation program that hopes to bring out-of-state businesses to California.

GO-Biz, Governor’s Office of Business and Economic Development, was created in 2010 to serve as California’s point of contact for economic development and job creation efforts. The staff also tries to retain businesses, encouraging companies to expand in the state and attract other firms to California.

The governor’s office created the GO-Biz team after the state closed its Department of Trade and Commerce in 2003.

Kish Rajan, the office’s director, met with more than 70 local business owners and government representatives on May 17 when he spoke at a Camarillo Chamber of Commerce luncheon at Spanish Hills Country Club in Camarillo.

The meeting was part of a statewide campaign by GO-Biz to improve relations between lawmakers and business leaders and figure out ways to cut through bureaucratic red tape by improving the permitting process and eliminating unnecessary regulatory laws.

Rajan said he and his staff have worked to improve California’s business image, such as the governor’s recent trip to China that resulted in the Chinese investing $2 billion into state projects, but the state continues to struggle with numerous challenges.

California is the ninth largest economy in the world, Rajan said, but because the state is so large and diverse it is hard to create a business-friendly environment that fits every industry’s needs.

“We’re not going to be able to construct an economic plan as a one-size-fits-all plan across the state and expect results,” Rajan said.

California’s economy, many business leaders say, is hampered by its environmental regulations. Rajan said he believes the state can do a better job of helping businesses function without compromising on environmental and worker protections.

He pointed to the governor’s effort to reform Proposition 65, a measure approved by voters in 1986 which requires businesses to post warnings if there are chemicals used that are known to cause cancer or reproductive toxicity.

Though the law was intended to improve public health, Brown recognized that small businesses suffered from what he called “frivolous shake-downs” by people who used the warning signs as reason to sue a company.

Alves asked Rajan to thank Brown for helping reform Prop. 65. Rajan said it’s an example of how Brown is beginning to understand how California’s long list of environmental laws affect businesses.

“California is a liberal state, and we believe very much in the environment, in the preservation of natural resources, and we care about our employees, their health and their well-being,” Rajan said.

“These are bedrock values that have always defined us, but we have to acknowledge that the (regulatory) system now has become so overgrown, so burdensome, so unpredictable and brings so much risk that it is indeed an inhibitor to business investment and business growth in the state.”

The director said California lawmakers should streamline the regulatory system so it is more consistent and transparent.

Rajan asked businesses leaders to call his office with examples of how regulations are hurting their industry.

It’s a policy shift that some feel won’t be enough.

Alves said despite California’s efforts to fix the regulations and become more business-friendly, the governor’s attempts may be too late.

“To stay alive, (California) truly has to change the trajectory of this regulation machine,” Alves said. “I’m starting to have a glimmer of hope, but we’ll see.”

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