The Sacramento business climate is harsh. Businesses complain that they can enjoy lower costs and less governmental burden in other markets. They wonder if they should remain here or buy into claims from Austin, Dallas and Houston their business environments are better. This proposal and the two others in my series will show how to make Sacramento more business friendly and reduce the allure of other cities. This is proposal two. Special thanks to Pam Goff for her contribution.
Proposal 2: Reduce governmental interference.
Business complains that state and local governments create an undue burden on local businesses. This burden dissuades investment, hiring and training. This burden renders other markets, such as Austin, Dallas and Houston relatively more attractive. I am proposing that businesses in a pilot program receive 20-year exemptions from state and local taxes. I am also proposing a local “common sense” litigation review board that would review any litigation involving a company in the pilot program.
The tax exemption is necessary to free up cash for other avenues. This cash would go toward investment, marketing, training, hiring, research and development. Business in the pilot program can allocate more funding to their investments. These purchases can include new equipment, new vehicles and office space (purchasing instead of renting dwellings).
Businesses in the pilot program also participate in a “common sense” litigation review program. When a business is either a plaintiff or a defendant in any form of state or local litigation, the review board will review both sides’ arguments and render the case worthy of a court’s time…or label it as frivolous.
Here is an example. A client of mine recently fired an employee who did not report to work for 21 days in a row. He claims his girlfriend was sick and asked for his job back. The employer said no, since he abandoned the job. This employee sued the company and complained the termination was illegal. The company paid their lawyers $10,000 in pretrial research. When the case went to trial, the judge threw it out of court and the company won. However, the company also paid its lawyers $10,000 for a case that was not worth the court’s time. If this pilot program were in place, the “common sense” litigation board would have reviewed both sides’ arguments, before any legal fees were incurred, and rendered the case frivolous.
I have my dissenters. They can argue that state and local governments need tax receipts to remain solvent. I can sympathize with that argument. I respond that businesses are going out of business, employees are not drawing income and those employees are therefore abandoning their homes. Governments receive no tax revenues from business that no longer exist, employees that have no income and homes that are abandoned. This move merely stops the downward spiral that occurs when a business dies.
My dissenters can also argue that my “common sense” litigation board is illegal. That may be the case. The legal system will probably be asked to validate or kill my idea. Regardless, legal fees cripple businesses. Frivolous lawsuits force companies to hire lawyers even when their actions fall within common sense.
Next up: I shall discuss creating a highly trained workforce that will receive occupational training and agree to remain in Sacramento afterwards.
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