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K. Lloyd Billingsley - Contributor
[Courtesty of Pacific Research Institute]

K. Lloyd Billingsley is Editorial Director for the Pacific Research Institute and has been widely published on topics including on popular culture, defense policy, education reform, and many other current policy issues. [go to Billingsley index]

Natural Born Killers
More legislation to destroy business...
[K. Lloyd Billingsley] 9/23/03

"Things are much worse than we expected. Things are much worse than you know. . . There is a strong conviction that government is no longer working . . . The picture is of a government frozen, without the vision or will to formulate policies or carry out long - range plans for the benefit of all people . . . You're not going to have enough money even to argue about it, unless you get jobs to pay taxes. There is an exploding shortfall. California will run out of money in a dramatic way, right around the corner."

The speaker was Peter Ueberroth, but not during the current election campaign, from which he dropped out. It was in April, 1992, when he headed the Council on California Competitiveness, commissioned by then - Gov. Pete Wilson in response to the flight of jobs from the Golden State.

Ueberroth, a former Olympic organizer and baseball commissioner, said that the biggest part of the problem was government. California, the Commission's report noted, had to create about 300,000 new jobs each year to generate enough taxes to pay for services such as health, welfare, and schools for the 600,000 new annual residents. But it wasn't happening because the state had become "a well-honed job-killing machine."

The Commission recommended making it easier for companies to meet state environmental requirements and called for lower taxes, including capital gains, and free-trade zones. Other recommendations included the use of mediators to avoid the courts system, measures against those who file frivolous lawsuits, tighter controls on education spending, vouchers for school choice, a longer school year and school day, and a vocational education program linked closely to industry.

For the most part, the state did not follow these recommendations. And, as predicted, it ran out of money in a dramatic way. But few recalled the warning of Mr. Ueberroth and his Commission. And even after a deficit of nearly $40 billion, politicians are honoring the job-killing machine with even greater vigor.

Senate Bill 2 forces companies with more than 50 employees to provide workers with health care and those with more than 200 to provide health care for workers and their families. Those companies that fail to do this will be taxed. As Daniel Weintraub of the Sacramento Bee pointed out, this amounts to a tax on hiring, creates a disconnect between supply and demand, and stands to make a bad problem worse. Under such a regime, companies will take care not to expand and will be likely to consider relocation. Other measures create similar incentives.

Courts ruled last year that employers are not liable for sexual harassment by customers or clients. Yet Assembly Bill 76, backed by the National Association of Women and California Labor Federation, would make employers liable for the sexual harassment of employees by customers. With sexual harassment now construed as eye movements and gestures, one could expect plenty of lawsuits - and businesses heading out of California or closing down.

The flight of jobs is not a new problem, and California has had ample warning. Whoever winds up running the state should take a hard look at the recommendations of Mr. Ueberroth's Commission. If such warnings continues to be disregarded, perhaps the last company to leave California will turn out the lights. That's unless, of course, there's already a blackout.

copyright 2003 Pacific Research Institute