How Much Good Will Secession Do Your Business? From The Newsroom by Michael Hart We at the Business Journal are hardly old warriors when it comes to the secession battles. None of us can say we remember what it was like “the first time” forces in the San Fernando Valley tried to break away from Los Angeles. But we have been around a little while. And while we have left the 60-point headlines to the Daily News and the withering comments from City Hall fixtures to the L.A. Times, we have tried to write about what secession could mean to those who do business here. So, it’s been interesting over the last few weeks, ever since LAFCO made its can’t-turn-back-now commitment to a vote in November, to suddenly have people waking up and asking, “What is all this about anyway?” Business groups, including the United Chambers of Commerce many of whose leaders have been nothing if not outspoken in their support of secession now are saying they need more time to “study” the issue before taking official stands. Add to that the anxiety of those in the opposition who are surprised to learn at least a million or so citizens aren’t happy with their city government and the absence so far of a clearly organized campaign in either camp, and you have to ask yourself: Where has everybody been the last couple of years? Outside of a few details LAFCO ironed out before its vote last month on how a breakup would work, nothing much has changed as far as the pros or cons of a breakup are concerned in quite some time. There are questions, indeed, and the truth is that, as the message is refined and simplified to appeal to voters who have less at stake, the issues move away from the economic sphere and more into that of equal representation in government, the kind of stuff Thomas Jefferson, not Adam Smith, would have been interested in. So what, in essence, is in secession for the Valley business community? What problems do companies have that will be solved? On the plus side and for what it’s worth, it could turn out that a few of the hoops one has to jump through in running a business will go away. It would also be hard for a new city not to have its feet held to the fire when it comes to business taxes. As it is, the leaders of the business tax reform movement come from the Valley, and they’ve been pretty successful so far. Part of that might be an attempt to appease Valley business interests at a sensitive time, but given the momentum that’s already in place, it would be hard for a new city council to go backward even with the tight budget it’s going to have to work with at the start. That’s two problems that might get solved. What else is there? City worker unions can be expected to fight secession the hardest and many would like to turn this vote into a plebiscite on organized labor. A yes vote would certainly be a symbolic victory for those who think unions now have too much influence over how city government is run. So what? How many private-sector employers in the Valley are unionized? I asked that question at a recent meeting of Assemblyman Bob Hertzberg’s business advisory commission and none of the 35 or 40 people there raised their hand. Allow me then to put the union issue in the red-herring column. In our last issue, both in this column and on the front page, we went into pretty close detail on the problems Van Nuys Airport operators will have if and when they go up against neighborhood groups south of the airport. Given the so-called grassroots appeal of secession, you’ve got to believe elected officials are going to listen closer to the homeowners associations than they are to the chambers of commerce. There is no doubt that what is perceived as government intrusion, excessive regulation and an out of control bureaucracy make it difficult to do business here, but it’s not clear to me what a new city government can do about that. Many of you are, or know, business owners or CEOs who have moved some or all your operations to Arizona, Las Vegas, Mexico, India anywhere except here. And if you haven’t, you’re thinking about it. But a surly clerk at City Hall was probably not the straw that broke that camel’s back. It was more likely what you feel are environmental safeguards and workplace rules instigated at the state or federal level that made the difference. It was more likely the dearth of affordable space to expand your business or the lack of a skilled workforce. It was more likely the fact that competition now is coming at you from all over the world, making any cost savings you can get from moving production elsewhere worth it. If you run one of the couple of thousand Valley small businesses that work in the entertainment industry, it’s probably the incentives the Canadian government gives you that are causing you to move production elsewhere. It’s probably the emergence of the monster entertainment conglomerates AOL Time Warner, Vivendi, Disney that has changed the equilibrium you enjoyed before. That’s the environment you do business in today. What can the Camelot City Council do to help you? Michael Hart is editor of the San Fernando Valley Business Journal. He can be reached at [email protected].