California Fleeing

(Stephen Moore/Political Diary) – Just when you thought things couldn’t get worse on the left coast, along comes more bad news for the Golden State. Across the country, Republican state legislatures and governors are adopting a new economic development strategy: Raid California for its jobs and businesses.

At least three Republican governors have said as much in interviews. The idea is to offer lower taxes, a more business-friendly atmosphere and the right to be left alone from overzealous regulators. “We just keep inviting California businesses to look at the economic climate in Texas, where we treat businesses like assets not villains,” said Texas Governor Rick Perry.

California has some of the highest tax rates in the country, the worst bond rating and a multitude of nettlesome regulations. Chief Executive magazine just ranked California as the most antibusiness state in the nation. A new study by Joseph Vranich, a California-based business consultant, found that 144 major companies relocated plants, research facilities, headquarters or their entire operations out of California in 2010. That was more than triple the pace of job-creating firms leaving in 2009. Mr. Vranich said that the outmigration could become “a stampede” in 2011. “Business owners tell me every day that this is just not a hospitable place to do business anymore,” he said.

Other Republican governors with their sights on California include John Kasich of Ohio and Rick Scott of Florida. Mr. Scott told me in an interview that “we are going to create hundreds of thousands of jobs in Florida over the next eight years, and we will advertise our pro-growth policies to businesses in places like California that don’t share our pro-business policy orientation.” He added: “Not having an income tax is a huge advantage over a high-cost state like California.”

Mr. Kasich told Reuters earlier this month that he will try to persuade California venture capitalists to relocate high-tech firms to his state. “More of the same is not acceptable to the business community in California,” he said.

Unemployment in California is currently 12.4%, and over the past two years the state’s jobless rate has ranked among the five-highest in the country. Businesses complain that the extraordinary power of unions, regulators and environmentalists has been an incentive to leave or not come in the first place.

We will see if Democrat Jerry Brown, the new governor, will do anything about that. If not, California’s loss may be a boon for Florida, Ohio, Texas and other states.