[Politech] T.J. Rodgers on how hostile California politicos are to tech firms

From: Declan McCullagh (declan@private)
Date: Fri Jan 28 2005 - 08:25:33 PST

There's an interesting article in the San Jose Mercury News. As far as
I can tell, the state promised to give certain companies (Intel,
Cypress, etc.) a tax break if they kept their operations in California
as opposed to sensibly relocating to an area that is less hostile to
business. So the CEOs decided to take California up on the offer and
kept some of their operations in the state that otherwise would have
ended up elsewhere.

Now a handful of Democrats are yowling that companies are getting tax
refunds, even though the revised law was approved by the entire
Democrat-controlled Assembly. I don't know the details of the
situation, but it seems to me that if state politicos want to keep
well-paying jobs in California, this isn't exactly the right
approach. At the very least, they could say "Okay, we're going to try
to deny you the refunds but want to work with you to make California
more competitive in terms of retaining jobs." Of course they're not.

Here's an excerpt:

"For T.J. Rodgers, the chief executive of San Jose-based Cypress
Semiconductor, quibbling over the refunds is an affront -- one of the
many reasons he has said ``Adios, California'' and moved the bulk of
his operations to Texas and Minnesota. He said the 4,000-employee
company paid $4.3 million in sales tax and invested about $52 million
in its Silicon Valley plant while the tax credit was in place. Of
that, the company has received about $3 million back in refunds.
``I can promise Ms. Migden something: She will never, ever, ever have
to worry about my company building a plant in California again and
getting insulted when we ask not to be taxed for the privilege of
building a plant,'' he said. ``We'll go somewhere else where they not
only do not tax us for building a plant, but they actually give us
incentives and credits and subsidies to create jobs.''"

I interviewed TJ Rodgers about just this:

Q: What's the business climate like in California today?
A: Let me give you an example. When the political pygmies fight with
each other in Sacramento and change the workers' compensation rules
every few years, it's a big jerk around for industry. Once we get our
payroll set up, we have to change it again. The local county and city
basically are just bears to deal with in trying to run a business and
build things.

Politech mailing list
Archived at http://www.politechbot.com/
Moderated by Declan McCullagh (http://www.mccullagh.org/)

This archive was generated by hypermail 2.1.3 : Fri Jan 28 2005 - 09:10:33 PST