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How much did they pay you to move to Texas?

Recreation-software-maker Active Network going to Dallas

Active Network, which makes recreational software for golf courses, camps, and the like, announced today (July 3) that it is moving its headquarters from Sorrento Valley to Dallas, Texas. In a news release, Texas officials gave credit to the Texas Enterprise Fund, which subsidizes companies that move to the state.

In trying to recruit companies, Texas touts the fact that it has no corporate income tax or individual income tax. However, it has a gross receipts tax, a sales tax, and property taxes. The state boasts that its 7.48 percent tax burden in 2011 was the fourth lowest of 50 states.

Active Networks is owned by Vista Equity Partners, a private equity firm that is based in Austin, Texas. Earlier this year, Vista moved an operation of Active to Texas.

Active Networks issued a news release that omitted the critical information, such as how many employees the company has, how many will move to Texas, and how much of a subsidy the company will get from the Texas Enterprise Fund. My attempt to get that information was fruitless.

The supposed spokesman, Kathy Bricaud, was not available and did not respond to requests for a callback. I also did not get callbacks from Darko Dejanovic, chief executive; Jeff Lambert, chief legal officer, and Greg Ingino, chief information officer. Sejal Pietrzak, chief administrative officer, refused to address questions and said I must call Bricaud. If I learn more I will update this.

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Active Network, which makes recreational software for golf courses, camps, and the like, announced today (July 3) that it is moving its headquarters from Sorrento Valley to Dallas, Texas. In a news release, Texas officials gave credit to the Texas Enterprise Fund, which subsidizes companies that move to the state.

In trying to recruit companies, Texas touts the fact that it has no corporate income tax or individual income tax. However, it has a gross receipts tax, a sales tax, and property taxes. The state boasts that its 7.48 percent tax burden in 2011 was the fourth lowest of 50 states.

Active Networks is owned by Vista Equity Partners, a private equity firm that is based in Austin, Texas. Earlier this year, Vista moved an operation of Active to Texas.

Active Networks issued a news release that omitted the critical information, such as how many employees the company has, how many will move to Texas, and how much of a subsidy the company will get from the Texas Enterprise Fund. My attempt to get that information was fruitless.

The supposed spokesman, Kathy Bricaud, was not available and did not respond to requests for a callback. I also did not get callbacks from Darko Dejanovic, chief executive; Jeff Lambert, chief legal officer, and Greg Ingino, chief information officer. Sejal Pietrzak, chief administrative officer, refused to address questions and said I must call Bricaud. If I learn more I will update this.

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Comments
32

Don, you've been stonewalled many times in your career. This is just another one of those times. They'll not answer questions because they likely didn't move any employees. Just lay off the folks in San Diego and replace them in Texas--not necessarily in that order.

But how long with this job bleed go on until our state responds? This isn't fiction, isn't imaginary, and will hurt the California economy if it continues or grows.

July 3, 2014

Visduh: First, to the method by which the news was released: over 50 years, I have gotten used to companies releasing important negative information late Friday (I assume it was released late), and disappearing. (If it was released earlier today, my apologies.)

But to your point: yes, only a few in top management will probably move to Texas. Others will be laid off. That doesn't have to be the case, but it so often is, and I am suspicious of this one. I did talk to one mid- or low-level employee who said he definitely would not be moved to Texas.

Should California compete and slash corporate taxes and hand out huge bribes to get companies to move to the state? I don't think so. This is a national zero-sum game that detracts from the U.S. economy. Somebody has to hold the line. Best, Don Bauder

July 3, 2014

Visduh, What do you expect California should do? Underbid Texas by lowering wages here? Texas underbids California; Arkansas underbids Texas; and Mississippi underbids Arkansas...and pretty soon everyone is working for bottom tier wages to keep the states competitive. How about we try something else? How about we check the companies books to see if they actually need to find lower labor costs, or are simply moving to increase already good profits? Then, if the company still wants to relocate, we have them pick up all related costs (unemployment, retraining, etc.) before they go. That would help California and maybe give the company pause before splitting.

This business of letting companies walk away scott-free and leave the state to deal with the consequences is just stupid. I'd like to know if any state funds were used to help this company get started? Did they get tax breaks? Start-up funds? If so, do they plan to, or have any obligation to pay that back when they get to enjoy the benefits of El Cheapo Texarcana.

July 3, 2014

Javajoe 25: You raise excellent questions. Did the company get subsidies from California? Even if it didn't, did it utilize state spending as it grew? Of course it did.

States competing with one another with low taxes and wages is stupid. Education and quality of life suffer as tax receipts drop. Similarly, the U.S. permitting individuals and companies to stash money abroad, thus cutting tax receipts and forcing middle class folks to make up the difference, is pernicious. And countries paying slave wages and offering tax haven secrecy to attract American business keeps those countries in financial distress.

There is an explanation for all this: colossal greed. It's fitting that a bumpkin like Texas's governor is a big promoter of this gouging that is antithetical to the national interest. Best, Don Bauder

July 3, 2014

The best thing that came out of Texas was an empty bus. Problem is most buses are full and heading into Texas. The worlds problem is overpopulation. Migrants from Central America. Arabs with nothing to do in the Middle East. Italy and Greece with high unemployment. The world is without work. Robots. Automation. Technology. Lawyers are not needed anymore because of automation and cloud technology. Loan officers are no longer needed to underwrite loan packages due to advanced algorithms. Corn is cheap, wheat is cheap, and little third-world farmers are not able to make money. Walmart expands internationally and annihilates the small businesses and marketplaces that have thrived for centuries.

Moving to Texas is a short term bottom line enhancement. In the long run, there is no place to hide. A world with growing unemployment and civil unrest. The U.S. cannot afford to continue to be the world police. The U.S. cannot continue to be the haven for the downtrodden of other nations.

The TSA is stupid and a waste of money. The next economic and terrorist event will be a terrorist attack that uses a nuclear device in a US city. The terrorist get it, we don't want them flying lanes into buildings. Yet the TSA in 13 years have NEVER apprehended a terrorist. The terrorists have grander plans, closer to the ground... like an EMP or dirty nuke. It is not a matter of "if," but "when."

Texas migration is a small footnote. The problems the US faces with illegal immigration are far more important. Men used to have middle class lifestyles framing homes and other building. Now who does that work? Our children used to mow lawns for extra cash. Now who does that? Our college aged kids used to work in fast food and retail to make cash for school and entertainment. Now who does that? Now we have migrant workers in fast food demanding a "living wage" for wrapping junk food in bags. Seriously? Well it won't be long before the robots take those routine jobs also. Then what are the uneducated, illiterate, language-challenged migrants going to do for work?

Happy Independence Day.

July 3, 2014

Ponzi: I agree that a major world problem is overpopulation. I agree that automation is one of several factors killing the American middle class. We have turned into a Third World nation with our level of wealth and income inequality, but CEO and Wall Street compensation keeps burgeoning every year.

I think the H-1B program discriminates against American-born engineers. But I am not for shutting our borders to Central and South American people who will be murdered if they do not seek a safe haven in the U.S. Our history shows that we are greatly responsible for the mess in Guatemala. And El Salvador. Our bumptious foreign policy, going back to the 1950s, is coming back to haunt us. Best, Don Bauder

July 3, 2014

TOTAL: $8.6 MILLION FOR 1000 JOBS. Texas Gov. Rick Perry is announcing that $8.6 million from the Texas Enterprise Fund will create 1000 jobs in the Active Network subsidy. The headline makes it sound like 1000 jobs are moving from San Diego. But the copy only says that the $8.6 million subsidy will be "creating" 1000 jobs. To me, that could mean that only a few people will move to Texas from San Diego, and the rest will be hired in Texas.

The CEO of Active Network says the move to Dallas will enhance the company's ability to "recruit great talent." So we really don't have an answer yet on local layoffs. My guess, based on past examples: there will be big layoffs in San Diego and hiring in Texas. Best, Don Bauder

July 3, 2014

It sounds like the company has too many native born engineers on the payroll. So they move the company to Texas, hoping most of the well-paid native born engineers quit the company. Once in Texas, they will hire Indian and Chinese engineers fresh off the boat at greatly reduced wages.

July 3, 2014

Burwell: That is a likely scenario. Logistically, it makes little sense to move many employees to a new state. It costs a lot of money, and money -- not fairness to employees, communities, customers, vendors -- is what most American companies are all about. The objective is to boost profits (often artificially), run up the stock to appease shareholders, and justify jacking up top executive pay to even more ridiculous and anti-social levels. Best, Don Bauder

July 4, 2014

Rick Perry has indicated several times that he eventually plans to move to San Diego and live here full time, if he can swing it financially. If God gave the world an enema, He'd stick the nozzle in Texas. Even Perry doesn't want to live in Texas.

July 3, 2014

Burwell: Wasn't it H.L. Mencken who used that analogy? Didn't he say it about St. Louis? Or Kansas City? Can somebody help us? Best, Don Bauder

July 3, 2014

Here's an H.L. Mencken quote, didn't see what you asked for but "Puritanism. The haunting fear that someone, somewhere, may be happy." Found out Mencken is the "Monkey Trail" journalist, one of my favorite stories. Wonder if Walter is a relative. Plato - "When there is an income tax, the just man will pay more and the unjust less on the same amount of income." Rick Perry quotes were too much crazy to repeat. Sticking a nozzle in Texas must be a Burwell original. Here's something I heard lately, (from a movie?) - Humanity Is A Duty.

July 5, 2014

shirleyberan: I don't think the Reader's satirist Mencken is related to H.L. Mencken. In fact, I would wager that our Mencken took the last name of H.L.

Oh, the monkey trial. Yes, it was H.L. Mencken that covered it so masterfully. Best, Don Bauder

July 5, 2014

GREEDY PEOPLE GO TO TEXAS

There is justice sometimes, even in this world.

July 5, 2014

Psycholizard: Greedy people are born in Texas, They are joined by other greedy people from other states. Texas, thy name is Greed. Best, Don Bauder

July 5, 2014

THE ECONOMIST MAGAZINE GIVES TEXAS AN A+, CALIFORNIA AN F. The Economist magazine today (July 7) has a piece on which state is most favorable to small business. The ratings are based on business climate, tax code, and regulations. Texas gets an A+. California gets an F. Best, Don Bauder

July 7, 2014

I love the bleating and moaning about Texas. I really do. I hope all of you build some really big signs to put on the 8 and 10 eastbound telling everyone who's headed out what a horrible place Texas is.

You should be thrilled. It's only a bunch of ignorant redneck racists who want to live in Texas, right? Shouldn't you be glad to see those people go? Shouldn't you be glad to see Texas spending money to encourage them to leave California? Don't worry, a few million more noble illegal aliens and welfare recipients will move in, and they won't be bringing any icky jobs with them.

S-O-U-R G-R-A-P-E-S

July 7, 2014

jnojr: Illegal immigrants enter Texas as well as California. The record of states and cities slashing taxes to attract business is not a good one. As tax receipts go down, schools and services decline, and then the company that got the subsidy can't get its employees to transfer there, and sometimes decides to move when its contract is up.

I am sure you will consider this sour grapes, but it should be related. Remember the ammonium nitrate explosion at a storage plant in West, Texas, last year? Fifteen people were killed and much of the town was wiped out. OSHA (federal) hadn't inspected the plant since 1985. The Texas Commission on Environmental Quality had dropped the ball, too.

I agree with you that a lot of regulations are unnecessary, duplicative, harmful to enterprise. But I would rather have that kind of waste than a LACK of regulation and inspection, which often is the cause of food poisoning and other dangers. One of the problems with our education system is cost-cutting for tax purposes. Best, Don Bauder

July 7, 2014

Attempts to force tax receipts up by increasing taxes ALWAYS fail and result in lower receipts, resulting in yet more cries for even-higher taxes.

And Texas does NOT have a "lack of regulation". I know it's popular to compare it to Somalia, but it's still a state in the US, subject to Federal regulation. They just choose to not layer on as much state and local regulation as CA... and they profit by it.

Oh, and what "cost-cutting" in education here? We pour more and more money every year into "education"... except it doesn't go into educating kids, it disappears into the maw of unions. More money only makes the problem worse. The US had a FAR better education system decades ago, when we could go to the Moon. Today, all our taxes and regulations and unions get us is millions of kids who know who Whoop-De-Doop the rapper is but couldn't give afact of history or science to save their lives, if you could pry them from their X-Box or iGadget long enough to ask.

July 7, 2014

jnojr: Attempts to raise tax receipts by increasing taxes do not necessarily fail. What fails -- always -- is cutting taxes and convincing the citizenry that lower taxes will pay for themselves and lead to a surplus. It does NOT work and never has. You should read about the mess that Kansas is now in because it listened to supply-siders who claimed it could slash taxes and wind up with a fat surplus. It has a massive, dangerous deficit.

I dislike your contempt of teachers' unions. I am not a great lover of labor unions, but I am a lover of teachers. Generally, I believe they are overworked and underpaid. If anybody deserves to have a union, teachers do. Best, Don Bauder

July 7, 2014

Not to mention backward thinking and bullying to enforce all to comply.

July 7, 2014

I don't know, maybe Chicago is worse. This 4th of July weekend, 7 dead, 50 wounded, celebrating. Friend of NRA, any resemblance of gun control wouldn't help in inner city violence? How many weapons of home destruction do they manufacture each year?

July 7, 2014

Illionois has had gun control, to nearly rival CA, NJ, or NYC for deacdes.

Why is it these mass murders almost always happen in "gun-free zones", and hardly ever in TX, VA, TN, AK, AZ, etc?

Oh, and the NRA does not, and never has, support the acquisition of guns by gang members. They're all felons who are banned from having guns.

July 7, 2014

jnojr: Illinois became the last state in the union to allow concealed guns a year ago. Gun advocates claim the murder rate has gone down but others say the statistics have been cooked. For some time, Chicago gun users have purchased their guns in a suburb.

Colorado has an "open carry" law and has had some of the grisliest mass murders of all. The way you phrased your statement, you said mass murders hardly ever happen in Virginia and Arizona. How about Virginia Tech? How about the shooting of Gabby Giffords and killing of others in Arizona? Best, Don Bauder

July 7, 2014

New report - 11 dead, 60 shot.

July 7, 2014

shirleyberan: I assume that's a new Chicago report. Best, Don Bauder

July 7, 2014

Private sales by licensed dealer is not happening here in Cal .

July 7, 2014

shirleyberan: Are you sure of that? Best, Don Bauder

July 7, 2014

But acquisition by gang members, mentally ill and children getting their adult family's loaded weapon to school or to home on a member in an act of depression is worth death of innocence. You pretend that's not a trend. I will not.

July 7, 2014

shirleyberan: Yet if you follow killings, mentally ill people and gang members are often the shooters. Mentally ill people seem to be generally responsible for mass murders. Best, Don Bauder

July 7, 2014

Don - on a weekend

July 7, 2014

shirleyberan: I assume Chicago on the July 4 weekend. Best, Don Bauder

July 7, 2014

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