California Legislators in Reno to address Business Retention

California Legislators Participate In Historic Nevada Hearing To Save Jobs Reno Forum Begins Process Of California Finding Solutions To Keep Businesses From Heading Out of State

Reno, NV, April 24, 2009 – A parade of businesses testified today that over-regulation, taxes and the cost of doing business drove them from California to Nevada in recent years at a historic forum here with California legislators and the Nevada Lt. Governor. 

More than a dozen California Republican legislators traveled to Nevada to hear directly from businesses why they left the Golden State and how California could work to keep businesses from departing their state.  

Many Nevada legislators were scheduled to attend the historic hearing, but were detained due to unexpected committee hearings in Carson City.  

Brian Krolicki, the Nevada Lt. Governor who chairs the state’s committee on economic development, said, “California’s pitch is to our advantage, everyone here is stating the reality that Nevada is a great place to do business.  California needs to do a better job, or more people are going to come here.  The more people who understand the Nevada story and what an advantage it is to be here today, I embrace that conversation.”

 ‘We came to Nevada for a simple reason – we wanted to go to the place where our jobs have relocated,’ said California Assemblyman Dan Logue, R-Linda, who chaired the event.  ‘We heard testimony from many businesses that have resettled in Nevada and why they left our state. We are in a crisis situation and we should begin addressing this crisis immediately.  Every month we wait, more businesses leave our state and more Californians are harmed.’ 

With California’s fast-increasing unemployment rate now topping 11 percent and devastating families and communities, Logue said the goal of the forum was to address California’s job crisis and begin to enact measures to create a friendlier business climate. 

‘It was clear we couldn’t survive in California in today’s global environment,’ said Steve Patmont, owner of Patmont Motor Werks (cq), who moved his business from Pleasanton, California to Minden, Nevada, in 2003. ‘Nevada is a place that appreciates those of us who are job creators. I say ‘God Bless America’ and “Thank God for Nevada.” 

Nearly 100 people attended the four-hour forum at the Nevada Motor Transport Association. Business owners blamed high worker’s compensation costs, taxes and regulations for driving them from California. 

‘I moved from California because I was being taxed to death,’ said Andrew Dombey, owner of ID Corporation in Carson City, Nevada. ‘I don’t want Nevada to become another California.’ 

Legislators also heard from Bob Ostendorf, president and chief executive officer of Neenah Enterprises Inc., which just this week began closing down its El Monte, Calif., plant, Gregg Industries, with 400 employees. Ostendorf said his business followed laws and regulations in California, but was continuously harassed by regulatory agencies, particularly the Southern California Air Quality Management District. 

‘At this point, we feel like SCAQMD is literally running Gregg out of California and our employees out of their jobs,’ said Ostendorf, President and CEO of Foundry Company, Gregg’s parent company.  ‘We’d rather cease foundry operations early than risk SCAQMD inspectors inciting workers who already feel worried about Gregg’s closure and the loss of their jobs. Neenah and its affiliates operate in four other states and have never seen any government agency behave like SCAQMD.’ 

‘The regulatory agencies have got to become part of the solution,’ Ostendorf said.  

Since 2001, California has lost 523,500 manufacturing jobs, representing almost 30 percent of the state’s industrial base.  Over the past eight years, the state has shed nearly 600,000 private sector jobs overall, according to the Employment Development Department. In December 2000, there were 12.5 million private sector jobs.  This February, that number had declined to 11.9 million. 

The Small Business Survival Index 2008 – which considers a state’s public policies and their impact on small businesses – recently ranked California 49th overall in terms of business friendliness.  On the opposite end of the spectrum, Nevada was ranked No. 2 nationally and best in several areas, including tax rates for personal income, corporate income and capital gains. 

In the past year, Nevada has spent upwards of $1.5 million on ads designed to persuade California businesses to move out of the Golden State.  It seems to be working as 135,173 more people moved out of California than moved in from other states, according to the California Department of Finance.  This represents a trend that began in 2005, long before the current financial meltdown.  It’s estimated that some companies can save as much as $300,000 to $3.5 million a year in taxes by moving from California to Nevada.