Huffpost Politics

Rick Perry Slams California's Business Climate In Ads Airing Across State (VIDEO, UPDATE)

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Texas Gov. Rick Perry slams California's business climate in a new radio ad airing this week across the state.

He says in the ad that building a business in California is "next to impossible." And the solution he has for California businesses is clear: "come check out Texas."

Perry says businesses should flee the supposedly not-so-Golden State for the Lone Star State, where there are "low taxes, sensible regulations and [a] fair legal system" (including roadblocks to suing a business when someone is injured or killed). Listen to the ad here.

The ads will air in Los Angeles, San Francisco, Sacramento, the Inland Empire and San Diego. They are paid for by Texas One, "a public-private partnership that markets Texas nationally and internationally as a prime business destination."

This is not the first time Perry has sought to poach businesses from California.

He has made several scouting trips and has written letters to California companies, as have representatives from other states during California's budget crisis, CNN reports. Perry noted that the cost of doing business in California is 6.3 percent above the national average and Texas' is 4.6 percent below it, partially because the state has no state income tax and a low business tax cut.

California Gov. Jerry Brown has shot back. In an interview on Marketplace Morning Report last month, Brown criticized Texas for its relatively large percentage of people working at or below the minimum wage.

Brown also said that he expects California's $96.7-billion general fund to end next year with a surplus thanks to cuts and taxes in his new budget plan.

UPDATE: Gov. Brown, at a business event in Sacramento Tuesday (see video above), said that Gov. Perry's ad is "barely a fart."

"It's not a serious story, guys," he said. "It's not a burp. It's barely a fart."

"A $26,000 radio buy is the smallest entry into the media market of California," he said. "Everybody's coming [to California]. The Brits are here, trying to figure out how to cooperate and be a part of our media, Internet, digital. Look, when you've got something good, people want to be here."

HuffPost received the following response from Gov. Brown's Office of Business and Economic Development on Monday:

“I can understand why Rick Perry is interested in California. We were the national jobs leader for most of the last year with 257,000 new private sector jobs,” said Kish Rajan, director of the Governor’s Office of Business and Economic Development. "But business relocations only account for 0.03 percent of annual job losses in California. At that rate of growth, it would take 20 years to lose just 1 percent of our businesses to relocation. The reports show that no state has ever poached their way to long-term prosperity. Real job creation comes from California’s history as a national leader in start-ups and the expansion of homegrown businesses.”

Poaching doesn’t work. This is something so many governors have done before and with the same ineffective results. One of the only real studies that’s ever been done on this, by the Public Policy Institute of California (PPIC), called it insignificant. During the two years of the highest departures in the study, California lost just 0.05 percent of the state’s total establishments. At that rate, it would take 20 years for California to lose just one percent of its business establishments due to out-of-state relocation.

And if you take a look at the new report from Good Jobs First in Washington D.C., you’ll see how little it actually got our visiting governor. In the first seven years of Perry’s administration, Texas got an annual gain of 0.03 percent in jobs gained from relocation. Even if you double that rate, it would still be an extremely small impact. So basically the report says that Texas officials should spend 99.97 percent of their time and money on everything else but chasing other state’s jobs.

There have been several high-profile company expansions this year including:
1) Samsung, which opened a major research-and-develoment facility in San Jose
2) Sutter, which built a new health care facility in Roseville that will employ over 1000 people
3) Amazon, which announced three distribution centers across the state
4) Caterpillar, which recently opened a 400,000 square-foot distribution center in Kern County to support a resurgent construction market which has grown by 4.4 percent this year.

Earlier on HuffPost:

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