Calif., Nev. Battle Over Who Is Worse For Business

California and Nevada are neighbors that usually get along, but lately they have been taking some nasty potshots at each other. The two states are engaged in a video ad war with each trying to label the other as a place that is bad for business.

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From NPR News, this is ALL THINGS CONSIDERED. I'm Robert Siegel.

As neighbors, California and Nevada usually get along. But lately they've been taking some nasty potshots at each other. The two states are engaged in a video ad war.

As NPR's Richard Gonzales reports, each is trying to label the other as a place that's bad for business.

RICHARD GONZALES: Okay, so the state of California is broke. It had to issue IOUs to its creditors and California lawmakers are held in low regard. But do they deserve to be portrayed as primates, as they were in a Nevada ad?

(Soundbite of TV ad)

Unidentified Man #1: So, that California legislature is monkeying around with small business again. Get your IOU yet? But don't worry, you know they love you. They just don't want you to relocate to Las Vegas where there is no corporate income tax, no personal income tax and low workers comp fees. If the legislature keeps monkeying around, you can kiss your assets goodbye. Get theā€¦

GONZALES: The man behind the video, A. Somer Hollingsworth, head of Nevada's Development Authority, says the ads must have struck a nerve. Scores of California businesses responded.

Mr. A. SOMER HOLLINGSWORTH (Chief Executive, Nevada Development Authority): They're telling us that the really deciding factor in California is, as far they're concerned, the state is anti-business. They could care less if they left. They could care less if they tax them to death. They really don't care about businesses there.

In Las Vegas and Nevada, obviously, has been very, very pro-business at both the state and local level.

GONZALES: California has long had a reputation as an expensive place to do business. But Assemblyman Jose Solorio of Orange County, says those ads hit below the belt.

Assemblyman JOSE SOLORIO (Democrat, 69th District, California): They dehumanize Californians. They depict our state as if every business is going to have a rotten future in our state. Sure, they were humorous, but so offensive that I thought that we needed to strike back this time.

GONZALES: And that's what Solorio did - on a Web site called californiaisgolden.com. There you can see California's answer: an ad picturing Nevada as a desert wasteland with a solitary cow meandering through the wilderness.

(Soundbite of TV ad)

Unidentified Man #2: Nevada is running ads here in California begging businesses to move to Las Vegas. But why would anyone want to move to Las Vegas? If anything, Nevada businesses should be moving to California. Let's face it, what happens in Vegas stays in Vegas. But what happens in California makes the world go round.

GONZALES: The screen lights up with the logos of 16 high-profile California-based companies, including Chevron, Apple and Walt Disney. But Las Vegas booster, A. Somer Hollingsworth, is unfazed.

Mr. HOLLINGSWORTH: I think it's good, solid competition. Again, you know, you're just comparing apples and apples and you're just trying to get business. And I thought it was great.

GONZALES: In fact, Nevada has as many problems as California. It has the nation's highest foreclosure rate and unemployment runs at about 12 percent. California has the same problem: the highest unemployment rate since World War II. But businesses aren't packing up and moving out, says economist Jed Kolko of the Public Policy Institute of California.

Mr. JED KOLKO (Economist, Public Policy Institute of California): The share of jobs that leave California every year due to relocation is incredibly small. It's about six-hundredths of a percentage point. In other words, roughly 10 or 11,000 jobs a year out of an 18 million job economy.

GONZALES: There's always been a healthy competition between the Golden State and the Silver State. But with both states suffering from sick economies, the stakes are a lot higher.

Richard Gonzales, NPR News, San Francisco.

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