The United States economy has hit a road block in the last year. Day by day, we continue to watch industries step up to the coffer with their hands held out high. Today, we watch in horror as to whether President Bush will bypass Congress and hand out money to the auto industry. Standing in the shadows quietly waiting for their "we're too big to fail" loans are now the state governments.
The biggest state asking for help is California. Anyone who has ever lived, worked, or been in a human resource position responsible for California should not be surprised by their record economic troubles. California is not a business-friendly state. The Government of California has imposed more rules and regulations on it's business community than most other states in the union. It is for that reason that business is flooding quickly out of the state and the tax dollars they are draining have a huge impact on California's budget short falls.
While most of the focus on the economy is currently being paid to the Federal Government, state governments continue to shoot themselves in the foot with already struggling economies. For example, in October of this year, Pennsylvania's state government led by Governor Ed Rendell passed the Energy Conservation Bill. What's the big deal about this bill? It calls for energy companies to reduce consumption by 1% in 3 years, and up to 4.5 by 2013. I am not saying we should be against energy conservation, but for a state to tell an industry to cut it's business by law is more than ridiculous.
Today, news came out that New York Governor, David Paterson is looking to raise $404 million for the state by increasing taxes on such things as hospitals, insurance policies and yes a disturbing "obesity tax" on non-diet soda. It is interesting that in a deep economic hardship the first thing some of these state governments see as a solution is to raise taxes on citizens who are already struggling to make ends meet.
If we are now going to impose an obesity tax on soda, where does this craziness end? Will he be taxing chocolate makers or candy makers in general? How about New York pizza parlors? I'm sure with all of those slices New Yorkers eat each year are bound to put on some of their extra weight? Why not just increase taxes on food in general?
With all of the intelligent people we have running these states, do you really wonder why companies head over seas? I know the instinct right now is to watch all of the loan bailouts the Federal government is dishing out, but I'd be keeping a careful eye on your local and state governments. They will have a much quicker impact on your paycheck and your wallet.