Nevada ads look to lure away California companies
The Associated Press
LOS ANGELES (AP) – Gov. Arnold Schwarzenegger calls California the land of opportunity. So does Nevada – but for a different reason.
Silver State officials last week launched an advertising campaign in several California cities, their latest attempt to hijack California companies weary of the state’s high insurance, utility and tax costs.
Nevada’s latest ads – running in newspapers with links to similarly themed Web sites – play off the wink-and-a-nod notion that even the bear on California’s state flag has skedaddled across the border to Nevada. Oversized outdoor ads will be draped on downtown buildings in Los Angeles, Sacramento, San Francisco and San Diego.
“We still think there is a real need there for companies that want a way out. There is an alternative – you can run for the border,” said A. Somer Hollingsworth, president of the Nevada Development Authority.
The $560,000 marketing blitz represents the most recent skirmish in an often-playful border war in which the neighboring states have tried to pilfer jobs from each other. Gov. Arnold Schwarzenegger once drove a truck down the Las Vegas Strip, offering to move any company to California.
Nevada’s latest promotion may get some laughs, but it won’t be a significant danger to the California economy, one economist said.
Any loss of jobs “is going to be marginal. The bigger threat is firms going offshore or to other states, jumping over Nevada,” said Jack Kyser, chief economist for the Los Angeles County Economic Development Corp.
Dozens of California companies have decamped for Nevada in recent years, but the hundreds of jobs lost represent only a tiny fraction of California’s huge economy. Nevada officials say 28 companies relocated to their state from California in the year that ended in June.
“Nevada’s built-in incentives for business – no corporate income tax, no personal income tax and no inventory tax – are just a few examples of the benefits to doing business in Nevada,” Lt. Gov. Lorraine Hunt, chair of the Nevada Commission on Economic Development, said in a statement.
California was more vulnerable to job raids when the energy crisis and a shaky economy exacerbated the political turmoil of the 2003 recall election. States from Texas to Oregon made pitches to snatch jobs from the state, with promises of lower taxes and a welcoming business climate.
Today, Schwarzenegger argues that the economy has rebounded, with nearly 500,000 new jobs added to private-sector payrolls in the state since he took office in November 2003.
“We know where the bear is,” said Mark Mosher of the California Commission for Jobs and Economic Growth, referring to the Nevada ads. “He’s visiting California’s innovative companies, its world-class universities, its Nobel Prize winners, its research and development labs.”
Worker compensation insurance and utilities remain costly in California, and companies frequently complain about heavy state regulation and taxes. Nissan Motor Co. announced in November it would move its North American headquarters – and nearly 1,300 jobs – from California to Tennessee to take advantage of the lower cost of doing business in the South.
The California economy is “doing surprisingly well, even with what they throw at the business community in Sacramento,” Kyser said, alluding to state regulation. Nevada officials are “just trolling for whatever they can get.”
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