California’s message to business: ‘Get lost!’

It’s a good thing Gov. Bill Owens and Mayor John Hickenlooper returned from their trade mission to California on Wednesday night. Had they stayed another day, both may well have ended up on the gubernatorial recall ballot.

Arnold Schwarzenegger, Gary Coleman, Gallagher, Arianna Huffington, Larry Flynt, Peter Ueberroth: Take your pick for the next governor of California. It certainly helps put Colorado’s problems in perspective.

Bob Reuteman Rocky Mountain News

Gov. Gray Davis’ fumbling attempts to balance a state budget with a $38 billion shortfall have led to a recall vote in October. Whoever wins will have 30 days to form a new administration and set out to solve the state’s fiscal problems. It’s a good bet most solutions will fall squarely on the backs of businesses.

"It makes a difficult situation much more difficult," Tapan Munroe, chief economist for the Capital Corp. of the West, a Merced, Calif.-based banking chain, told The Associated Press Friday. "A sound economy needs a sound political infrastructure. It’s hard to imagine how we are going to have that now."

Against that backdrop, a Colorado delegation spent two days making courtesy calls to Silicon Valley companies, most of which already have a significant presence in Colorado – Sun Microsystems, Hewlett-Packard, PeopleSoft and Lockheed Martin.

"We didn’t go there to try to steal jobs," said Tom Clark, head of the Metro Denver Network, which arranged the trip. "The meetings were more along the lines of how we can help them be more successful in Colorado. We want to hold onto those jobs."

An article in the Aug. 11 issue of Fortune is headlined, "What message is California sending to companies? Get lost!"

According to the magazine, Democrat Davis has embraced the unions’ agenda in a desperate effort to get their money and support to fend off the recall effort. With the Dems controlling both houses in the legislature, several new laws seem stunning to those of us in the "square states":

• Starting next summer, employees can request six weeks’ paid family leave annually. Companies have no say. Increased payroll taxes for all workers in the state will fund such leaves.

"We’ll spend a lot more time training replacement workers, and our productivity will decline because of absenteeism," Verizon’s California chief exec, Tom McCallion, told Fortune.

• The legislature mandated that businesses will pay for increased workers compensation benefits. They already pay the largest premiums in the country – $5.85 per $100 of employee wages versus a national average of $2.50. But benefits will rise 71 percent, from $490 a week in ’02 to $840 weekly in ’05.

Verizon, for instance, will pay four to five times more per employee than it pays in Texas.

• Overtime rules were changed so that it must be paid to anyone working more than eight hours a day rather than 40 hours per week. Companies offering flex-time or four-day weeks will be penalized.

"One company we spoke with brought up the family leave program," said Don Dunshee, president of the Broomfield Economic Development Corp. and a member of the trade delegation. "Their work force is mostly 35 and under, so they’re worried about the disruption of activity and a severe financial hit. They also raised the subject of workers’ comp."

"It’s getting difficult if not impossible for them to conduct business," Dunshee added. "Whether it’s land use development or workers’ comp or family leave, companies translate everything to the bottom line. If the numbers no longer work in California, they push up the periscope and look around. That’s why we were there, to make sure we’re on the radar screen."

"Honestly, I felt a sense of sadness on the part of these companies," said Clark of the Metro Denver Network. "They love California. They just can’t make any money.

"However the conversations would begin, they very quickly turned to how oppressive all these proposals are for businesspeople," he added. "They were venting. We represented someone to talk to, to tell how frustrated and angry they were. But they usually ended the conversation by saying, ‘You gotta understand, this innovation machine in Silicon Valley is so amazing. We have to be here among all these new ideas and technologies, no matter how difficult it is.’ "

I got a new CD the other day by country rocker Dwight Yoakam, a Bakersfield boy. It starts out with a song, The Late Great Golden State.

The chorus goes like this: "In the late great Golden State/ It’s gettin’ hard to negotiate/ When you’re one slip from a grim fate/ In the late great Golden State."

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