New Podcast on the State of California’s Business Climate with Joseph Vranich

June 23, 2011

This week on the Tax Policy Podcast, I talked with Joseph Vranich, a business consultant and “relocation coach” for companies looking to move or expand their operations into new places. Recently Joe reminded us just how extreme the tax and regulatory climate is for businesses in California (where he’s based), pointing out that in large part because of unfriendly state fiscal policy, the number of companies “de-investing” and moving out of state has increased by five times just in the past few years.

Our losses are occurring at an accelerated rate. Also, no one knows the real level of activity because smaller companies are not required to file layoff notices with the state. A conservative estimate is that only 1 out of 5 company departures becomes public knowledge, which means California may suffer more than 1,000 disinvestment events this year. The capital directed to out-of-state or out-of-country, while difficult to calculate, is nonetheless in the billions of dollars.

Things are apparently worst of all in the southern part of the state, causing Joe to comment during our interview “I have declared Los Angeles to be the single most business unfriendly city in the entire country.” This comes just a couple of weeks after Mayor Antonio Villaraigosa told small business owners that L.A.’s city government is “dedicated to your needs.” I’m sure the city’s employees are dedicated, but to hear Joe tell it, they’re more devoted to taxing, regulating, and fining than allowing businesses to actually succeed. California as a whole, by the way, is currently ranked 49th on our annual State Business Tax Climate Index.

Joe isn’t only a business consultant, by the way – he’s also a policy analyst who has worked with a lot of think tanks and nonprofit groups over the years. He’s written extensively about transportation policy for the Reason Foundation, the Cato Institute and the Mackinac Center. You can also find his books on rail transit at Amazon.com.


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