VSP rejects offers to relocate

California's business climate is often criticized as overregulated and overtaxed and its companies are regularly courted by other states, but Rob Lynch, CEO of Rancho Cordova-based Vision Service Plan, says his company is staying put.

Lynch, admits the state needs an image makeover, but he says its anti-business reputation is more perception than reality.

"The state could do a better job of PR by appearing business-friendly," Lynch said. "It needs to make business people believe that California is a good place to be."

At VSP, growth is humming along despite recession; its eyewear brands have gone global and the core business – a 57 million-member vision benefit plan – is among the largest in the nation.

VSP is a $3.7 billion company of international reach in a growing health field with a skilled, white-collar workforce.

The not-for-profit's success hasn't gone unnoticed by states looking to lure the company to faraway ZIP codes in Oklahoma City, Phoenix, Dallas or Buffalo by trading on California's reputation as a state unfriendly to business.

"We've been heavily recruited (by other states). The drumbeat's pretty loud," Lynch told The Bee this week.

Lynch remains firm in his commitment to California and the Sacramento area, but other companies have been receptive to the idea of relocating.

Late last month, Ronald Mittelstaedt, CEO of Folsom-based Waste Connections Inc., the Sacramento area's largest publicly traded company, said his firm was considering a move to Texas.

Mittelstaedt declined to be interviewed for this story. But in an earlier Bee story he said: "This is the worst state in the country to do business in," citing a tough business climate and a "dysfunctional" state Legislature.

Changing that perception is the job of people like Brook Taylor, a spokesman at the Governor's Office of Economic Development, or GoED.

Taylor said California, home to Apple, Google and more than 50 Fortune 500 companies, relies on its competitive advantage to keep and expand existing businesses while attracting and encouraging new firms.

Taylor ticked off a number of enticements, including tax credits for research and development and new markets; tax exemptions for clean technology manufacturing; expansion grants and loan guarantees for small business.

"We offer incentives that save businesses time and money. We're a worldwide leader in high tech, clean tech, venture capital, green tech. We have the tools businesses need to grow. California is still at the forefront," Taylor said.

"But," he added, "we're losing the PR war." Aggressive competition from Texas, Arizona, Nevada and other states, has made California a tough sell.

Some business leaders say that real problems underlie the state's image issues. They say thickets of regulation, taxes and complex legislation are choking off business and chasing away companies.

A stalled economy only adds to the frustration, said Jack Stewart, president of the California Manufacturers & Technology Association.

"California is in two holes: the economy is a big hole we have to climb out of and we're in a big PR hole," he said.

"We need an economic development program to grow revenues and the economy," Stewart said. "Our No. 1 priority need to be to keep what (businesses) we have and don't chase the others out of here. We need somebody in government who'll be a cheerleader for California."

• Read more articles by Darrell Smith

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