As I reported in the last post, a group of 13 California Republican legislators has come to Reno, Nevada, to find out why businesses are leaving the Golden State for the Silver State.
It's not rocket science, and the politicians on both sides of the Sierra know it.
"It is the worst it's been since 1979," says California Assemblyman Dan Logue of job losses. Actually, California's unemployment rate hasn't been this high since the Great Depression. Logue bemoans the loss of a half million manufacturing jobs over the last five years, while he says in the last year state government hired 35,000 workers. "Sooner or later that ship's gonna roll over."
As I noted in the last post, the Small Business and Entrepreneurial Council ranks California 49th in business friendliness (just ahead of New Jersey), and dead last in personal income taxes.
Nevada is second in business climate, just behind South Dakota, and tied for first in income taxes (it has no state income tax, no inventory tax, no estate tax, and no corporate tax, though employers do pay a small payroll tax minus deductions for employer provided health benefits).
Yet while Nevada is pleased to welcome California entrepreneurs seeking a lower cost environment, the state is under pressure to raise taxes to make ends meet, as tourism and the housing crisis have taken a toll. "Our challenge in Nevada, policy-wise, is not to become California," says Republican State Senator Mark Amodei, who represents the area outside Reno. Otherwise, he says, why would anyone move here?
What I found most interesting is that the California delegation is being hosted here by the Nevada Motor Transport Association.
Why would Nevada truckers want politicians from the next state over coming in to lure business back across the border? Because the two are so entertwined. "When California is doing well, Nevada is doing well," says the NMTA's Paul Enos. "When California is anemic, Nevada needs a blood transfusion."