N.H. Seeks West Coast Work
Officials tour California hoping to lure business

By Clare Kittredge, Globe Correspondent, 9/25/2003
Source: Boston Globe
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New Hampshire's top economic development official touts it as the "Live Free or Die Tour."

That's how George Bald, state Department of Resources and Economic Development commissioner, refers to the delegation he is heading in California this week to lure high-tech companies to New Hampshire.

"We're calling it the Live Free or Die Tour because it's our state motto, and we want to talk about the advantages of doing business in New Hampshire, and the business opportunities this state can offer companies that want to stay in California but do business with us," said Bald.

"With the gubernatorial recall taking place, we felt that the time was right to talk to California companies seeking an East Coast location," he said, in a separate statement

The Coalition for California Jobs, a collection of groups that includes the California Chamber of Commerce, recently released a study giving the California business climate an "F."The study comparing California's business climate with that of 15 other states -- including Massachusetts -- ranked California next to last, just before New York.

The New Hampshire delegation's trip to Los Angeles will focus on high-tech manufacturing, financial services, and biotech companies looking to leave California or expand to the East Coast.

If the trip is a success, some of that business could wind up on the seacoast and at Pease International Tradeport in Portsmouth, according to Bald.

"The seacoast offers a lot of opportunities. Because of my familiarity with Pease, I will be able to speak to its benefits," said Bald, who was economic development director at Pease International Tradeport between 1994 and 1998.

Among the selling points the New Hampshire delegation will stress are the Granite State's low taxes, business-friendly government, quality of life, and less expensive housing than California, according to Bald.

"We have a favorable tax environment, less government regulation, and a friendlier government that tries to work with companies to solve problems," he said.

California, with its graduated personal income tax, has a top tax rate of 9.3 percent, while New Hampshire has no personal income tax, said Michael Bergeron, who works for the state Office of Business & Industrial Development and is one of the lead business recruiters in the state. He plans to go on the trip.

California also has a 6 percent sales tax, versus none in New Hampshire, said Bergeron. "The top capital gains tax is 9.3 percent in California, versus none in New Hampshire."

"Key is workers compensation, which is 0.81 percent of covered wages in New Hampshire versus 1.49 in California on average, though the specific rate depends on the industry," said Bergeron.

Bergeron said he will be making his pitch to two markets during the trip. "One is the company presidents and CEOs, the decision-makers in small to medium-sized companies, and the people who represent them, the site consultants and real estate brokers."

As Californians struggle with high taxes, traffic congestion, crime, and air pollution, New Hampshire is in a good position to lure businesses, said Bergeron.

"Portsmouth is a great example of a city that emulates what creative people are looking for," said Bergeron. "A lot of people are looking for the quality of life near the ocean and mountains and sidewalk cafes and a diversity of people that Portsmouth offers. They want a lot of the benefits of being in California without the burden of being in California."

To sell New Hampshire, Bergeron plans to point out that the state has outperformed all other New England states in terms of growth, employment, income, and gross state product in the last two decades.

"In terms of per capita income, New Hampshire ranks sixth in the US," Bergeron said, citing updated 2002 Census data.

Public Service of New Hampshire is paying the travel and other expenses for Bald, Bergeron, and three other people to visit California. The trip is expected to cost about $8,000, according to Pat McDermott, economic and community development manager for PSNH, the state's largest electric utility.

McDermott said New Hampshire's advantages over California include average residential and business electric rates that have dropped about 15 percent from fifth-highest in the nation two years ago to below the New England average.

"Number two, our rates are projected to remain relatively stable and decline over time. And New Hampshire has an adequate supply of electricity compared to California," McDermott said.

Unlike California, which has had electric shortages, rolling brownouts and rising electric rates, New Hampshire is not likely to face similar woes, according to McDermott.

"We're targeting companies that want an East Coast presence," said McDermott. "And we're positioning New Hampshire as the choice of the Northeast, whether they want to expand here or partner with companies that are already here."