Nevada is going after California business in creative way

With all of California government's financial problems, Nevada economic development officials think this is a good time to lure Golden State businesses across the border. They are spending $1 million on an advertising campaign that warns California businesses that they will lose if they don't move to a more business-friendly state.

One ad says, "If the Legislature doesn't stop monkeying around, you can kiss your assets goodbye." It features a monkey making spitting sounds at the camera, with bananas falling from the sky, according to the Los Angeles Times.

The Nevada effort points out that the Silver State doesn't have corporate or personal income taxes and no inventory tax. The campaign also says Nevada's workers compensation costs are much lower than in California.

The neighboring states have fought for each other's business for years. In 2004, California Gov. Arnold Schwarzenegger made a much-publicized visit to Las Vegas and drove an 18-wheeler down the strip. The truck was plastered with signs that encouraged Nevadans to move their businesses to California.

Now Nevada is trying to take advantage of California's budget problems. The state is paying its bills to vendors with IOUs, a practice that Controller John Chiang said will continue until Sept. 4. That makes this an opportune time for Nevada to go after California businesses, which have been frustrated by high taxes and state regulations.

But there's another reason Nevada is getting agressive right now. The state is reeling from the economic downturn and it needs an influx of new capital to get its economy turned around. The once booming state is seeing residents leaving because they can't find jobs.

Gov. Schwarzenegger disappoints in California

Arnold Schwarzenegger swept into the California governor's office in 2003 with great popularity, and a mandate to change government in the Golden State. Instead, the Republican governor teamed with the Democratic Legislature to run up massive budget deficits that could not be covered during the economic downturn.

The budget gap in California was $15 billion in February, $22 billion in May (when a ballot package raising taxes failed) and now it is estimated by the governor to by $24.3 billion. Clearly, something is wrong with California's political leadership, and it starts at the top.

Schwarzenegger addressed a joint session of the Legislature on Tuesday, and said the government's "wallet is empty." I think we already knew that, governor. With voters turning down tax increases, the only alternative is massive cuts to state programs.

That means education (which has the biggest share of the budget) has the most to lose, along with the most vulnerable: children, elderly and the poor. They don't have lobbyists looking out for their programs.

The only way this budget can be balanced is for a lot of needed programs to be devastated. Unfortunately, that's the price Californians are going to have to pay after the state has been on a spending binge for most of Schwarzenegger's tenure as governor.

Schwarzenegger has the rest of this year and all of next year to turn around his governorship. Plenty of time to resurrect his image if he comes up with a plan to save California. So far, though, his ideas have been lacking.