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Arizona business group wants tax-weary California businesses

November 16, 2012 |  8:30 am

Phoenix

An Arizona business group is reaching for one of the oldest plays in the book -- offering to help California companies avoid higher taxes by leaving the state.

The Greater Phoenix Economic Council said it will fly 100 chief executives to Arizona for a grand tour of all the Grand Canyon State has to offer.

“If I were running a company in California, I would have a deep internal debate about the direction of the state," said Barry Broome, the group's president. “You just have an environment in California that isn’t good news for people who build and run companies.”

California voters approved Proposition 30 last week, raising the sales tax by a quarter-cent for four years and income taxes on high earners by one to three percentage points for seven years.

The Arizona group expects to spend about $200,000 on the program after expanding it from 50 to 100 chief executives because of strong initial interest.

Broome himself has some experience choosing between California and Arizona. He almost took an economic development job in San Diego last year before deciding to stay in Phoenix.

Gil Duran, a spokesman for Gov. Jerry Brown, dismissed Broome's overture.

"Anybody who tries to convince you to leave the best and richest state for some parched desert outpost should be regarded with extreme suspicion," he wrote in an e-mail. "Scam alert!"

Administration officials cited a study from the Public Policy Institute of California, which said business relocations are a smaller factor in job loss in California than in other states. In addition, a recent Stanford study said millionaires are unlikely to leave California because of higher taxes.

Publicity pitches aimed at getting businesses to cross state lines are a fixture on the political scene.

Then-Gov. Arnold Schwarzenegger sent a moving truck to Nevada as part of a pro-business advertising campaign. And Iowa Gov. Terry Branstad is one of several Republican leaders who routinely target the Golden State in hopes of poaching jobs.

ALSO:

Poll: Enthusiasm for ballot measures motivated state voters

Proposition 30 win no guarantee of fiscal safety for California

California legislative analyst issues 'promising' report on budget

-- Chris Megerian in Sacramento
twitter.com/chrismegerian

Photo: The Phoenix skyline in 2003. Credit: Matt York / Associated Press

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