Monday, May 5, 2014

Toyota's move to Texas and how we can fight back


The media as well as several economic and political analysts have been all over Toyota's decision to move its U.S. headquarters from Torrance to the Texas City of Plano as part of a consolidation effort. There's been a bunch of debate and speculation as to why the automaker decided to do this. Several groups and politicians are blaming California's regulatory policies placed on the private sector. Others are pointing fingers to Toyota itself for "laying off" its California workers of whom do not desire to move to the Lone Star State.

Whether Toyota elected to move out of Torrance because of ill-advised business policies at the state level is still speculation. But what is clearly not speculation is that the economy in the Inland Empire and many parts of the Los Angeles area are still generally soft and our limited public transportation options here at home clearly reflect this even with record-high gas taxation. We're not here to spread speculation, but to present some general facts relative to Toyota's consolidation move and how Californians can fight back for a first-rate economy, clean air, and fully funded public transit system operating on robust and paid-for transportation infrastructure.

Texas and California: General Business Policies


It is a clear fact that Texas has laws on its books and a tax code that are both much more friendlier to businesses than the Golden State. The reality is whenever taxes or fees in one area become too high, many elect to relocate to dodge such high costs. Toyota's supporting manufacturing plants are also based mostly on the east coast. The state government in Texas also offered Toyota a $40 million incentive. Incentives and tax breaks, of course, drive up private investments. Because the United States has a capitalistic economic system, businesses are free to make as much profit as they can. They are free to decide where they want to do business. They are free to consolidate or grow.

To be fair, we're not giving Texas a pass on all of this. This is simply due to reports that pollution levels have gone up with the Lone Star State's economic growth according to the Texas Commission on Environmental Quality. While they need to be business-friendly, state regulations and rules cannot be so lax or underfunded where growth and development in the economy goes unchecked. That leads to pollution, corporate corruption, urban sprawl, and traffic congestion. No American should want that.

So, what can Californians do to fight back?

First, local officials need to rally their people and better demand the state to pass laws that make California a better place to do business so that both the economy and marketplace job opportunities soar without the dirty air, white collar greed, sprawl or jammed transportation infrastructure. A clean and healthy market economy is a prime source of how our public transit systems get paid for. Because the Inland Empire economy has generally been stagnant with the exception of a few areas of logistics and medical sector growth, many regions are still at the mercy of a bare-bones bus transit system. Good luck trying to get between Lake Elsinore, Corona, and Ontario by bus.

We are seeing some local leadership. Torrance Mayor Frank Scotto went on record on CNBC to confront the complex regulatory and liability structure of California law. State rules need to be streamlined and made more business-friendly. To be clear for the reason stated earlier, there has to be some rules and regulations in place and we're not calling for such policies to be abolished altogether; that would be insane. But they need to be simplified and costs need to be made more affordable so that the private sector will be better inclined to build up the marketplace. That's how we can better fund our transit agencies like RTA and Omnitrans.

Scotto also reported the city will do whatever it can within its power to entice another business to replace the jobs left by Toyota. Torrance's Comprehensive Annual Financial Report states that the Toyota headquarters employs over 3,300 workers but the city certainly has some prime real estate. The weather is absolutely gorgeous. Being a coastal city in between West LA and Long Beach, the climate is very comfortable, even during the summer months. Crime is low and the demographics are affluent. We believe Torrance can entice business entrepreneurs to invest their money there with good jobs.

Scotto's courage stands in contrast to what we see from the state government.  Last Friday, Governor Jerry Brown went on record stating that there was very little the state could have done to prevent Toyota from moving citing the consolidation efforts as the reason. Even if Brown's statement was completely true relative to Toyota, what is also true is the Inland Empire economy is still stubbornly soft no thanks to weak leadership. Local Inland leaders need to take a leadership role too and not tolerate any excuses. Toyota is investing its money in Plano and its manufacturing plants are elsewhere in the country; they're not being invested here! Even the Los Angeles Times' editorial board acknowledged that other states are competing for business and opined that this fact confronts the ill-advised business policies that obstructs business growth, policies that our ideological state legislature proposes on a regular basis according to the newspaper.

While we're seeing a growth in logistics and medical here at home, very few solutions have been broadcasted into the public arena from state and local Inland officials over the regulations and government misspending that obstruct robust economic smart growth and transit-oriented development in places like Lake Elsinore, central Perris, the Pass Area, Cabazon, and the Hemet Valley. These places and several others within the Inland Empire have unique features which can make them desirable places to invest in business and marketplace job growth. They should be affluent regions too.

The state and local governments have to deal with this reality. Local officials need to stop omitting this issue and pressure the state to fix its complex regulatory code which would better improve California's business climate which would make it more competitive, especially within the Inland Empire. Because the San Bernardino and Riverside counties are home to great weather, beautiful landscapes and mountains, and several tourist destinations, our Inland Empire region should be affluent with abundant economic job opportunities with a robust public transit system and transportation infrastructure. Both state and local officials  need to aggressively entice more businesses to invest back into the region. Between this and controlling government waste and misspending, that's how we can get a robust transit system that is paid for. That's how we can fight back.

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