SACRAMENTO, CA - Green businesses have joined the exodus of California companies leaving the state or expanding only outside state borders.
In 2011, 172 companies have moved out or are moving out of California, Business Relocation CoachJoe Vranich said.
Vranich, who tracks the movement of companies, said the number of companies moving out of the state is five times higher than the rate of companies that moved out of California in 2009. According to Vranich's research, the states most likely to receive fleeing California businesses are Texas, Arizona, Colorado and Nevada.
"Everything is difficult to do in California." CEO of Green Trail Energy Dennis Wingo said. "When you try to rent property, the different requirements, the unemployment compensation. We knew if we were going to expand we either had to hire a bunch of robots who wouldn't cost workmans' comp or move operations out of state."
Green Trail moved all operations to Maryland earlier this year.
"We were looking around to see what state made most sense," Wingo said.
Maryland offered Green Trail tax incentives and guidance to help through the state's regulations, Wingo said.
Many green businesses based in California are choosing to expand outside the state.
Rocklin based SMA America just built a new solar panel manufacturing plant in Denver. It will eventually employee 700 people. General Manager Jurgen Krehnke said the company took a hard look at doing the project in Sacramento.
"Initially, the people we worked with, consultants, almost immediately dismissed this and said, 'Oh, California, it's too expensive. It won't work,'" Krehnke said. "We said, 'Wait a minute. We want to at least take a look.' We would've had a preference to have the factory right here. There was some concern about the cost of the location, the availability of manufacturing labor, there was concern about the budget crisis and whether it would lead to increased taxes. This all led us to believe that California was a little bit more difficult to defend."
What makes green businesses more vulnerable economically in California is the need for manufacturing. Of all green jobs, 26 percent are in manufacturing. Business owners said California's complex environmental codes and the high cost of energy makes the state a risky bet for green business.
"The green economy can't compete in California because all the materials are being made overseas," Assem. Dan Logue said. "We don't have the manufacturing, which is 53 percent of the cost. Now energy costs are going to skyrocket with cap and trade."
Logue has taken two trips with other legislators and Lt. Gov. Gavin Newsome to states where California businesses have found new opportunities.
"When we were in Nevada, we listened to 100 businesses that left the state and one gentleman got up and said, 'California was the death of a thousand cuts,'" Logue said.
Business owners said California can learn from other states who are working hard to attract business. Krehnke said many cities they toured went into "pageant mode."
"[We were assigned] a dedicated person to call anytime to ask questions," Krehnke said. "They arranged meetings with the mayor so we got very good exposure to the right people. We were educated on incentives and they went out of their way to put themselves in a good light."
Logue said the governor has over 600 appointments and should switch out the bureaucrats for people who understand business. He would also like to see the passion of the occupy movement turned on the legislature.
"When you go to the Central Valley and look at the unemployment rate and look at who is representing those people, you need to rise up," Logue said. "I need to see them in Sacramento sometime outside my window, 10,000 of them saying, 'I want to go back to work. What are YOU doing?' You cannot kill the goose and expect golden eggs."