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"California - So Many Issues Without Clarity in Direction"
So, the results are in and everyone knows that California did not hear the same message that the rest of the country heard. We did not exactly vote for manufacturing here as I hoped we would do in my mid-October blog. Paraphrasing Hugh Hewitt, a nationally syndicated radio host and professor of constitutional law at Chapman University, the tsunami of fiscal rebuke crashed on the shores of Arizona. It missed California completely.
According to almost any reliable source, California has one of the more unfriendly business climates in the country. CNBC's annual Top States For Business 2010-Categories And Criteria puts California a lowly #32 in its annual rankings of states, in terms of being business-friendly. And if the election results in November are a preview of what's to come, don't expect that ranking to rise anytime soon. Here are the 10 categories that are considered in their rankings:
- Cost of Doing Business
- Workforce
- Quality of Life
- Economy
- Transportation & Infrastructure
- Technology & Innovation
- Education
- Business Friendliness
- Access to Capital
- Cost of Living
These categories are weighted, with the most weight given to the top of the list and the least to the bottom.
OK, so we here in the Golden State take a lot of (mostly) good-natured teasing about living here. But when you look at the bi-polar views of the voters, you really have to wonder. Here are some of the "good" and the "bad" in terms of manufacturing according to the California Manufacturers & Technology Association (CMTA):
Here's the "Good" for manufacturing -
- Prop 26 passed and taxes can't be passed as fees.
- Prop 24 failed and a few of CA's competitive tax policies remain.
- Redistricting commission remains intact (Prop 20 passed and Prop 27 failed).
Here's the "Bad" for manufacturing -
- Prop 23 failed, ensuring increased energy rates and other costs for all manufacturers.
- Meg Whitman lost and CA loses our staunchest opposition to the state's "factory tax".
- Carly Fiorina lost and CA loses opportunity to put committed champion of manufacturing in the U.S. Senate.
The sleeper, in terms of a potential huge increase in the cost of doing business is the affirmation by the
California Supreme Court of the August 2010 Almaraz/Guzman decision which allows deviation from a
strict application of the AMA Guides when rating injured workers' impairment. The additional costs
have already been factored into the recent Workers' Compensation Insurance Rating Bureau
recommendation for a rate increase of 29.9%. Insurance Commissioner Steve Poizner (see our blog
from February 2010) has rejected the increases. We'll see what happens. Meanwhile, California has the
5th highest workers' compensation premiums in the country.
But, if anything describes us, we are eternal optimists. There are good reasons to live, work and play
here in California. After all, check out my late-November photo below (with appreciation to Mike
Kartsonis of Dynamic Fab in Santa Ana):
From all of us at TCI, wishing all of you a happy and healthy holiday season...
-John Belzer
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