Nevada and Arizona Lure Tax-Hit Businesses from California
Nevada and Arizona are trying to capitalize on California's latest ballot measures by attempting to lure tax-burdened companies out of the golden state.
According to the Las Vegas Review Journal, the Las Vegas Regional Economic Development Council (LVREDC) plans to launch a campaign to attract businesses across state lines. Tom Skancke, CEO of the LVREDC, told the paper that he "welcomed all California businesses" and that his development staff would be reaching out to their contacts in California in the new year.
Arizona business leaders have made a more ambitious play for businesses fleeing tax hikes. The Greater Phoenix Economic Council (GPEC) launched a program to fly 100 Californian chief executives to Arizona for a tour of what the Grand Canyon state has to offer. Speaking to the L.A. Times, Barry Broome, President of the GPEC project, questioned the continuing viability of businesses in California
"If I were running a company in California, I would have a deep internal debate about the direction of the state. You just have an environment in California that isn't good news for people who build and run companies."
The program has extended its initial ambitions looking to target 100 high-tech companies with 200 or more employees; double it's initial plans of 50. So far 11 CEOs have committed to meeting with the GPEC. Gil Duran, a spokesman for Governor Jerry Brown (D-Calif.), dismissed the program in an email saying; "Anybody who tries to convince you to leave the best and richest state for some parched desert outpost should be regarded with extreme suspicion. Scam alert!"
The number of businesses leaving California this year is said to be on track with last year's figure of an estimated 254. However, with the increase in statewide sales tax (from 7.25 percent to 7.5 percent) brought in by Proposition 30, a boost in income tax rates for the next seven years on incomes over $250,000, the newly implemented cap-and-trade program and an elimination of many business tax loopholes by Proposition 39 more and more companies may be persuaded to move states.