When proclaiming the end of the ‘California Dream’ there are two basic areas that naysayers point to: taxes/high cost of living and environmental regulation. Let’s look at taxes first. It’s true, California has a high sales tax but then again, so do Washington, Texas, and Nevada (another state often cited as a supposed destination for fleeing California businesses). The last time I checked, Seattle had a couple successful technology businesses to its credit. What about corporate taxes you say? Well, if you thought our corporate income tax rate was bad, you obviously, haven’t done business in Minnesota, Rhode Island, or yes, even Massachusetts, lately. Each of those states has higher corporate income tax rates than California.
As far as environmental regulation goes, I would invest in and protect our unparalleled natural resources rather than let polluters run amuck any day of the week. And if some companies are going to head out of state to avoid environmental regulations, well, they aren’t going to Massachusetts. Massachusetts Sen. John Kerry and California Sen. Barbara Boxer are currently co-sponsors of a recent and wide-reaching climate bill. California and Massachusetts have been national leaders in environmental regulation in terms of both legislation and state funding and will probably continue to be less-than-ideal destinations for environmentally irresponsible companies.
Of course, California does come with a high cost of living. But that’s not unfathomable for an extremely populous state with rich human capital (not to mention our unpolluted natural wonders).
None of this is to say that I believe we can afford to be cavalier about retaining a thriving technology industry. We absolutely can’t. California is lucky enough to be a highly desirable location to live and work in and we need to ensure that tech businesses can always find the best and brightest minds here in the Golden State. That’s one reason California’s universities are so crucial to the future of California’s technology industry.
For the time being, we need to be vigilant in ensuring that the choices California makes contour to the needs and desires of tech businesses (those in our state currently and those considering relocating here). But instead of lamenting the imminent end of California’s tech industry, let’s celebrate the reasons we’re a technology leader in the first place and get to work, ensuring that they never change.
Three areas California DOES need to take action:
1. The cost of energy.
2. Further economic incentives for new and existing tech businesses (especially where energy/green tech is concerned).
3. Maintaining our leading colleges and universities that are educating and training the next generation of innovators.