Welcome to the September Housing & Jobs issue of NorthBay biz magazine. It’s hard to believe, but it’s about time to begin planning next year’s editorial calendar. By the time you’re reading this column, we’ll be assigning stories for our Growth vs. No Growth December issue. Unlike newspapers, the culture of early deadlines and working well in advance is normal for the magazine industry. In compiling our editorial calendar for each new year, we endeavor to pick cover themes that address topics that have the greatest impact on the North Bay business community. One cover theme you’re sure to see again next year is housing and jobs. The reason for this focus is straightforward—jobs are inextricably linked to affordable housing—and both strongly impact the economic vitality of the entire region.
Inside, in addition to all the stories, you’ll find dozens of local columns and special features in this month’s magazine—information about local business often unavailable anywhere else. We welcome your comments, suggestions and ideas on how NorthBay biz, the area’s only locally owned business publication, can continue to serve you as the voice of business in the North Bay.
Before I get to the rest of this month’s column, I’m especially pleased to announce that Fred F. Conner has joined NorthBay biz as Director of Sales. For the past 10 years, Fred was associated with the Marin Independent Journal and Marinscope Community Newspapers, where he oversaw an array of their business operations. With 29 years of print media experience, including strategic posts with USA Today, Fred brings extensive knowledge of operations and sales to NBB along with established relationships with community leaders, nonprofit agencies and local businesses. Fred lives in Petaluma with his wife, Paula, and their daughter, Cori. Please join us in welcoming Fred to his new responsibilities and home at the magazine.
Just yesterday, I had the opportunity to hear a local politician speak about the recently concluded state budget process (fiasco). To his credit, he had criticisms not only for the Republicans role in the debacle, but also his own party’s (Democrats) shortcomings in the final compromise of what he termed just another “gimmicked-up” budget that only “kicked the can down the road” for a true satisfactory solution. However, he bemoaned the fact that this budget was all about cuts and didn’t raise revenues by raising more taxes. Apparently his memory is short—so short, in fact, perhaps he and all his cohorts calling for even higher taxes should see a specialist concerning memory loss.
In the past nine months, our esteemed, fiscally responsible Sacramento legislators have raised our taxes by a record $19 billion. In October 2008, to resolve the 2008-2009 budget shortfall, the Legislature passed more than $6 billion in tax increases. Three months later, in February 2009, they passed another $12.5 billion tax increase to plug the deficit for the 2009-2010 budget. So, when they were still billions short of balancing the budget, they most reluctantly—and tragically, at least in their minds—had to make budget cuts. And I certainly agree that too many of these cuts hurt people who need the help the most. But I also wonder why, when cuts must happen, it’s always people’s such that get reduced and not the countless bureaucracies themselves?
It seems public employee unions and the legislators really do need their short-term memories checked, because business is bearing far beyond it share of the tax burden. In the U.S., the top 1 percent of wage earners pay 40 percent of the total income taxes collected. The top 20 percent account for 80 percent of taxes paid, leaving the bottom third of wage earners paying nothing. California is among the top five highest taxed states. With that combination, something has to give. Our local tax base is eroding. One out every five taxpayers is paying four out of five tax dollars before factoring in the burden of state taxes. So is it surprising businesses are packing up, leaving town and taking their jobs with them?
Yet still, Sacramento fiddles as businesses burn up the roads out of town and the tax base goes south—or, in this case mostly east. California competes directly for companies that create jobs and expand the tax base with low tax states that rank nationally: Oregon #26, Colorado #34, Arizona #41, Nevada #49 and Alaska #50 in their state tax burden. To make matters worse, when you factor in business-inhibiting regulations and fees, California is ranked #48 in the country for its overall business climate. In this ranking, Nevada is ranked the third best state in which to do business and Oregon is ninth and Arizona is 22nd. Is it any wonder then, that California has lost, in a seven-year stretch from 2001 to 2008, almost 450,000 jobs in the manufacturing sector alone? Add to that the 295,000 jobs lost in the construction industry from December 2006 until June 2009 and you’re at three quarter of a million jobs in just two industries.
Jobs mean growth, and growth is the only way out of the economic valley (chasm) we’re in. How much higher can we raise taxes before a tipping point is reached and the givers flee the state leaving only the takers? Joel Fox of Fox and Hounds Daily reports on an editorial in the Las Vegas Review Journal whose headline revealed how another state views California’s fiscal mess: If Only We Could Tax More and this revealing subhead: And Other Fairy Tales from Our Neighbor to the West.
With a shrinking tax base because of a business climate that absolutely stifles growth, when will our legislators or, as they prefer being called, “utopian progressives” finally figure out the way to raise revenues is to lower taxes and simplify/remove onerous regulations? A commitment to encouraging businesses to relocate or start-up here and thereby creating jobs means a return to prosperity. Without it, the state will continue plodding towards insolvency with nothing but best intentions.
Maybe the solution begins with recommending a flat tax for California at the proposed Constitutional Convention—Fat Chance.
That’s it for now. Enjoy this month’s magazine.
