Tuesday, December 13, 2011

Waste Connections Pulls Out of the Sacramento Region

Every few months, it seems we get another reminder that California's persistently high unemployment is due, in large part, to its toxic business climate. Businesspeople around the country are uniformly negative in their opinion of the state's tax and regulatory regimes, and Irvine-based Joseph Vranich continues to find success helping companies move to other states. And today, we have word, from the Sacramento Bee, that Vranich may have a new client soon: Folsom-based Waste Connections is moving its corporate headquarters to Texas.

While many will point to the lobbying battle the firm lost this year, when it pushed for a failed bill that would've made it easier to move trash among the state's different landfills, as the cause of the move, Waste Connections' concerns have run deeper than that for some time. In a phone interview, CEO Ron Mittelstaedt said that California is "structurally and fiscally broke," and said "[t]his state has the highest state tax rates in the nation, and they're going higher." On the other side, an attorney for an environmental group that fought Waste Connections over the landfill legislation offered this reaction to the news: "They aren't really a California firm; they're a national mergers and acquisition firm." Somehow, this speaks volumes about how politically-connected environmentalists in California view the private sector. If you're not willing to submit to every business regulation Sacramento can dream up, and you don't believe that your business exists to create tax revenue for the government, then you're not "really a California firm."

Waste Connections is apparently already on the move to The Woodlands, a suburb of Houston; it expects to completely relocate its headquarters by next September. The move will wipe out only about 100 jobs, but the loss of the Sacramento region's largest publicly traded company carries a symbolic significance in a corner of California that's lost 75,000 jobs in the past five years, and expects its economic future to center around government retirees.

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