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Wednesday, March 6, 2013

Red Tape, Federalism, Business, and California

Previous posts have discussed California's economic problems.  Some of its wounds are self-inflicted. The Sacramento Bee reports:

The path to starting a business in California has a speed bump.
David Lerman knows all about it. Two weeks ago, he filled out a one-page registration form for a wine exporting company that he hopes to start soon.
But after dropping off the form and $85 to cover fees, he found out the secretary of state's office has a six-week business-registration backlog. [emphasis added]
It's the kind of story that out-of-state business poachers, including Texas Gov. Rick Perry, use to kick dirt on California's business climate. Similar business transactions in the Lone Star State take less than a week.
"This is a businessperson's introduction to doing business in this state," said Lerman, a Berkeley labor attorney. "'Welcome to California. Now get in line.'"

Other states turn around similar applications much more quickly.
New York takes seven business days to process registrations, according to its secretary of state's website. For an extra $150, officials there can finish the filing within two hours.
California offers four-hour, same-day and 24-hour expedited filing services and charges between $350 and $1,000, but only for filers who bring their papers to the secretary of state's Sacramento headquarters.
Texas processes limited liability company registrations such as Lerman's in three to five business days. Online applications, which aren't yet an option in California, take less time.