Golden State Loosing its Luster?
Loosing its Luster?
Elevate Economic Development!
The past 30 days the attention of California's state political leaders have been
spent on trying to find solutions to the state's $14 billion budget shortfall and
preparing for this week's election either for their own re-election or for the passage
or defeat of a ballot measure or in support of a candidate for the presidential
campaign.
Lost in this process within this time frame, have been the loss of three
of the state's Fortune 500 firms; Bank of America, a former California based
business and its acquisition of Pasadena's Countrywide Financial; CSC's decision
to move its headquarters to Falls Church, Virginia and the potential loss of Yahoo
given its current unsolicited offer by Microsoft for $44 billion.
Mainstream media in the state have written independently about all three
actions but few if any have written about the totality of the consequences
associated from these actions.
The loss of these companies to the state beyond the jobs and their corporate
decision making will be significant. In a state that is currently starved for
revenues, the loss of such business giants is only going to add to the shortfall
of the state's budget given the loss of their corporate taxes.
CSC's loss is very unfortunate, but it sounds like its decision was based upon
the personal decision by its current CEO and where he wants to live. However,
a company that employs 90,000 is no longer headquartered in California. Similarly,
with Countrywide Financial, the nation's largest mortgage lender and its acquisition
removes this company's moniker and potentially its operation center from
the state. And should Yahoo accept Microsoft's offer, the loss of the third Fortune
500 will occur.
The lack of attention to these details illustrates the need once again for a statewide
economic development organization. But during the last state budget fiasco, it was
eliminated. Now this time, the shortfall is caused by the mortgage meltdown
and California has nothing to turn to for assistance to help foster economic growth.
And let us hope that local jurisdictions do not reduce budgets to their economic development
organizations for they are the last bastion of hope to help reverse the tide of the economic
downturn.
Tim Johnson
www.CaliforniaBusinessMinute.com
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