Voter approval of ballot measures increasing taxes on the wealthy in California as well as state sales and business taxes is prompting the Las Vegas Regional Economic Development Council to market Southern Nevada to disgruntled companies in the Golden State.
"We welcome all California businesses," said Tom Skancke, CEO of the LVREDC, successor of the Nevada Development Authority. "We also welcome businesses from around the world to look at Nevada's business climate."
California voters on Nov. 6 approved Proposition 30, which is expected to raise $6 billion a year. They also approved Proposition 39, which closed a number of loopholes, including how multistate corporations calculate their California taxes.
Christopher Thornberg, founding partner of Beacon Economics in Los Angeles, didn't believe voter approved tax increases will translate into an exodus of businesses.
He said California has "always been expensive," from real estate to the cost of living. Thornberg said businesses will benefit because some of the new money will go to stabilizing the state's education system.
"Businesses want to be here despite all the issues that California has," Thornberg said.
Proposition 30 raises the statewide sales tax from 7.25 percent to 7.5 percent for four years and boosts income tax rates for seven years on income over $250,000 a year.
State income taxes for those earning more than $250,000 increased to at least 10.3 percent.
The rate for those making more than $1 million rises to 13.3 percent.
Thornberg said if any industry was vulnerable it was manufacturing, which deals with high energy costs and strict environmental laws in California.
"They would be the most likely to leave," the veteran economist said. "But it's due to regulatory issues, not taxes."
Stephen Brown director of the Center for Business and Economic Research at the University of Nevada, Las Vegas, disagrees, saying it is about taxes.
"In terms of businesses in California considering or actually relocating here, I can tell you taxes are the primary motivation," said Brown.
Nevada does not have a personal income tax. The Silver State's sales tax rate is 6.85 percent, with local rates adding as much as 1.25 percent.
Gov. Jerry Brown, D-Calif., bet big in November asking voters to approve the measure to help solve the state's ongoing budget deficit. The Legislative Analyst's Office in Sacramento now predicts a much smaller budget deficit of $1.9 billion through the next fiscal year.
The state's budget shortfall was projected to be $16 billion.
Skancke said don't expect to see a major marketing campaign before the start of 2013.
"It's the end of the year and to get the creative work done will take some time," Skancke said. "What you'll see our development staff doing is reaching out to their contacts in California. We may do some direct mail and other marketing."
Skancke, who took over running the LVREDC on Nov. 1, said it was a "tough time of year to do anything."
The Silver State is not alone in trying to entice California companies to move. Arizona and Texas are trying to poach jobs from the Golden State, Brown said.
He said both states are specifically targeting companies in Southern California. Brown said Texas and Nevada don't have personal income taxes, while the rate in Arizona ranges from 2.59 percent to 4.54 percent.
The Greater Phoenix Economic Council recently announced it is expanding its California 50 program to 100 California-based CEOs due to high demand. The program aims to fly 50 Golden State CEOs to Phoenix to tour the market.
"The response to the California 50 program has been overwhelming," said GPEC President and CEO Barry Broome. "We've heard from CEOs up and down the California coast, representing firms in the technology, medical device, financial and life sciences industries.
Broome said the companies have ranged in size from 300 to 10,000 employees.
To qualify for the program, applicants must be CEOs at high-tech companies or with corporate facilities with 200 or more employees, or at emerging technology companies with compelling intellectual property.
"Texas is too far away for many companies," Brown said. "Arizona may offer a little different lifestyle choice than here, be we're both desert communities. We have the advantage of low taxes compared to the extreme politics they have in Arizona."
Brown said it really all depends on where a company wants to relocate.
"If we are looking further down the road, we need to build an economy that is not just dependent on gaming and hospitality," Brown said. "We need education and infrastructure that can support new industry."
He said if Southern Nevada could make the adjustments that "might make us even more attractive to business."
Contact reporter Chris Sieroty at firstname.lastname@example.org or 702-477-3893. Follow @sierotyfeatures on Twitter.