Assessment of California regulations needed, says business development exec

By John Breslin | Feb 23, 2018

SACRAMENTO - If there is one person who knows the business of doing business in California and its relationship with state neighbors and rivals, it is Barry Broome.

SACRAMENTO  - If there is one person who knows the business of doing business in California and its relationship with state neighbors and rivals, it is Barry Broome.

The one-time cheerleader for doing business in Arizona's biggest city, Broome is now tasked with selling the merits of Sacramento and the wider northern California region.

In his time as the chief executive of the Greater Phoenix Economic Council, Broome was central to luring some 250 companies to the area, many of them from California to the area. Some were washed away following the 2008 crash and the Great Recession, but many remain, he said.

And there was no question of what was on the top of the list of talking points Broome and his team used to attract companies to Arizona from California - fewer regulations and lower taxes.

Now in California as chief executive of the Greater Sacramento Economic Council, Broome's view of the state's regulatory environment has changed little. He believes there are far too many regulations handed down, particularly from the state level, and that there needs to be a root and branch assessment and measurement of their worth, and the ditching of those not needed and not working,

Broome told the Northern California Record that his job in Phoenix, which he held from 2005 to 2014 was in large part, to compete with Texas for those companies that decided to leave California.

When he was in Arizona, it was always recognized that a strong Californian economy was vital, not to just to the wider west, but also to the country and internationally.

"It is the most professional and, in terms of economic development, important to the U.S. and internationally," said Broome, who was headhunted to lead the Greater Sacremento Business Council.

"California invents everything, it drives innovation," he said, adding that of the total amount of venture capital disbursed in the U.S. most went to the Golden State.

Indeed, it was even more than 50 percent. Of the $140 billion disbursed in the three years to 2016, $78.4 billion went to California. Further, it also leads in the number of patents, close to a third of all filed in the U.S. in 2015 and consistently the same in previous years.

The state added jobs at a rate of 1.6 percent over the past 12 months, matching the rest of the nation. Its unemployment rate is 4.7 percent. 

Arizona has a different outlook, Broome said. California can argue on value terms while the neighboring states work on highlighting less onerous taxes and regulations to entice companies.

Broome spent six and a half years in a similar business development role in Michigan prior to taking up his position in Arizona.

And in both places, it was always recognized that California has a lot to teach the rest of the country.

"Everyone wants to be a Silicon Valley, all are duplicating, where Michigan, Madison, Wisconsin, or Atlanta, Georgia," Broome said.

And his team's argument for Sacramento is that companies will be in the epicenter of a region where there is an opportunity for profitable returns on capital and ease of access to global markets.

But, said Broome, California has to address the huge number of regulations and widespread state interference in business.

He quickly points that the business council supports big-ticket moves on climate change, including cap and trade, and supports those cities dubbed sanctuaries.

"But we do not need 19,000 regulations," Broome said. "State government should ... back off with the interference because it is causing problems."

The council maintains that decisions on what should be regulated is best done at a more local level, either by cities or regions and that the state has to ease up on attempting to control all manner of activities, including planning.

And, Broome said, the less spent by the state on trying to enforce regulations, the more money will be available to put back into hiring teachers for schools in Los Angeles or into higher education.

He argues that a systematic assessment and measurement of the worth of regulations are needed.

His now-home base of Sacramento is partnering with the Bay Area to develop what might be described as a northern Californian mega-region.

The Greater Sacramento Business Council began its partnership with the Bay Area about a year and a half ago.

Thirty-nine company CEOs and leaders of 19 communities meet regularly to map out a master plan for development across the region. This included developing transport links.

Broome pointed out that 134,000 workers living in Sacramento travel to the Bay Area for work.

As San Francisco and his environs become increasingly not affordable even for those on way above median wages, Sacramento and the entire region can benefit, those advocating for the northern California megaregion argue.

The city of Sacramento's population expanded by 1.4 percent over the past year, the fastest growth rate among the 10 largest California cities.

Nearly 20,000 people each year relocate from the Bay Area to the greater Sacramento region, according to a 2014 five-year estimate by the U.S. Census Bureau. And the median age of those living in the city is 36.9.

The big job now is to make sure both the companies and the people remain.

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California Supreme Court Greater Phoenix Economic Council U.S. Supreme Court

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