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Legal reform needed to keep jobs in California

While there is no simple solution to fixing California’s economy, there is also no question that economic recovery cannot occur without job creation and retention.

That is why it has been so disheartening to see Nevada target our state to take our jobs. And Nevada is far from the only state trying to get business from California; it is just the most vocal about it. Nevada has spent a small fortune trying to lure businesses away from California by selling itself as better for business.  Nevada’s ads make a great point – California business owners are right to doubt whether doing business in California is in their best interest. A recent study by the Tax Foundation ranked California 48th in terms of its business tax climate. Taking into account California’s regulatory and legal climates, it’s likely that number could slip even further.

Yet our legislators continue to make doing business more difficult in California. In fact, Assemblymember Jose Solorio even launched his own counterattack to Nevada, claiming a business climate should take into account more than just taxation and regulation, including “amenities that make California an attractive place to live.” Tell that to the small business owner trying to pay their bills or comply with multiple regulations with a sunset or an ocean view outside their window.

Talked about even less than taxation and regulation, however, is California’s legal climate. A survey by California Citizens Against Lawsuit Abuse of small business owners illustrated that California business owners overwhelmingly feel that the law favors those who sue. More than 98 percent of those surveyed believe California’s legislature needs to pass new laws to protect businesses from frivolous or unfair lawsuits.

But so far, our elected officials have continued to ignore the demands of their constituents. Year after year, we see common sense lawsuit abuse reform bills stall in the Senate and Assembly Judiciary Committees. At the same time, personal injury lawyers are among the biggest campaign contributors to our legislators. Coincidence?

It took placing a proposition on the ballot in 2004 for voters to mandate that a plaintiff actually had to incur some sort of damage in order to file a lawsuit, a measure designed to curb drive-by lawsuits that were wreaking havoc on small businesses. Personal injury lawyers have been trying to chip away at this ever since it was passed, with varying degrees of success.

Once upon a time, people came from all over the world to live in California. Now we’re seeing people fleeing the state to find the very things California was once known for, including innovative jobs. Last year alone, 144,000 more people moved out of California than into the state.

Until our legislators understand that a legal structure that encourages business growth rather than hinders it is vital to a successful economy, we will continue to see this trend.  Perhaps the best thing we can do is force our legislators to learn the hard way, by voting out those who continue to bow to special interests and replacing them with those willing to work for all Californians, not the interests with the deepest pockets.


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