S.D. Firms Threaten to Take Their Businesses Elsewhere : Industry: The likelihood of new fees and taxes has several of the county’s largest employers looking to relocate outside the area.

For years, local companies have complained about the high cost of doing business in San Diego specifically, and in California in general, citing the exorbitant price of housing, the plethora of municipal fees they have to pay and high state taxes.

Lately, business leaders have been crying louder than ever. They’ve been spurred by a proposed local air pollution-traffic management plan that could trigger millions of dollars in annual fees for some large employers and by looming state tax increases designed to help balance the huge California budget deficit.

Several of the county’s largest employers, including Rohr Industries, Cubic Corp., Solar Turbines and General Dynamics, are threatening to move operations out of the county to more hospitable states once the new fees and taxes take effect. Although threats of this sort are nothing new, local and state officials seem to be taking them more seriously.

“They’re penalizing companies for doing a good job,” Cubic Corp. Chairman Walter J. Zable said in an interview last week. “We’re trying to provide jobs, but it costs more and more money to do business in the city or the state.”

Zable is threatening to pull a $43-million toll collection contract out of California because of the growing local and state tax burden. The contract is to build and install a comprehensive toll-collection system for the Florida Turnpike. Cubic normally would manufacture the system at its plants in San Diego, but it is now giving “serious consideration” to building it at plants in New Jersey, New York, Tennessee or Mexico, Zable said.

Cubic is not the only company threatening to take a walk. Rohr Industries of Chula Vista could move 1,100 of its 6,600 Chula Vista employees out of state in two years, a Chula Vista city official has said. Solar Turbines, which employs 2,500 in San Diego, will probably move to one of several out-of-state sites being studied unless it can lengthen the lease on its 29-acre site on Harbor Drive. The San Diego Port District has told Solar to leave once its current lease expires in 2000.

“We have not decided on a location yet but are studying the options, and leaving San Diego is one of multiple options open to us,” said Bernie Theule, general manager of human resources at Solar Turbines. “We would like to stay, but in all fairness to the corporation and shareholders, we have to look at the options of moving outside.”

The dire state of municipal finances in California has caused an increasing tax burden to be placed on corporate taxpayers statewide, said Steven Frates, executive director of the San Diego Taxpayers Assn., a fiscally conservative government watchdog agency. But San Diego may well be reaching the level at which companies “look for greener pastures.”

“San Diego has been able to trade for a long time on the charm of the community and the charm of sea, sun and beaches,” Frates said. “But now we’re up against the fact that it is very difficult for business to come here.”

San Diego businesses large and small were hit this year by an increase in business license fees from last year’s $30 for each business, plus $4 per employee, to $125 per business and $5 per employee. The resulting outcry, particularly from smaller businesses, has been such that City Councilman Bruce Henderson proposed rolling the license fee back to $30.

City manager Jack McGrory insisted that local business license fees compare well with those in other areas of the state, but conceded that the city, like others in California, has been caught in a serious financial bind. As population in the city and state continue to grow, sales taxes are off. Growth in property taxes across California has slowed with the recession.

The newest thorn in the sides of Zable and other local businesses is a traffic reduction plan proposed by San Diego County Air Pollution Control District. The proposal is scheduled to go to a vote before the county Board of Supervisors in September. As proposed, the plan would levy fees of up to $50 per employee per month on companies that fail to cut employee commuter trips to prescribed levels.

The goal of the plan is to encourage companies to require at least 1.5 employee passengers per vehicle on company lots by 1999. If adopted, the measure would eliminate 500,000 commuter trips daily in the county as well as “10 tons of pollution per day,” said Bob Goggin, a spokesman for the San Diego County Air Pollution Control District.

General Dynamics, the county’s largest non-government employer with 16,700 employees on its local payroll, does not believe it can meet the minimum ride-sharing requirements and says it may be faced with an estimated $10.5 million in fees as a result. That added cost “gets to the point where the straws tend to break the camel’s back” and could force the aerospace manufacturer to consider moving some operations elsewhere.

“That’s a $10-million straw,” said George Roos, vice president of human resources at General Dynamics’ Convair division.

Although the county proposal stipulates that employees be ultimately liable for the fees, General Dynamics said it would be stuck with paying them because most of General Dynamics’ employees are unionized and cannot be forced to pay under collective bargaining agreements.

Mary Lou Towner, controller at the San Diego Marriott Hotel & Marina, San Diego’s largest hotel with 1,355 rooms, said the Marriott has already begun car-pooling efforts and that a significant percentage of its 1,700 workers use the San Diego Trolley and buses. But any additional fees that result from a traffic-management plan would hurt her hotel and local tourism in general, she said.

“Those taxes you pass on to your guests, so, if we get too high a level of parking fees, it can affect our business because (potential guests) look at the total cost package,” Towner said.

Local executives also say they are fed up with local fees for construction as well as by the delays in getting building permits. According to data prepared by Rohr, a major Chula Vista plant addition took Rohr 3 1/2 years and $745,000 in fees from the proposal stage to completion.

By contrast, a Rohr plant in Sheridan, Ark., took eight months and cost no fees to open. And a plant in San Marcos, Tex., took seven months and cost no fees to build.

All California businesses, including those in San Diego, would feel the impact of proposed increases in state taxes. Among the proposals being floated in Sacramento is a 1.25% increase in the state sales tax to 8.25%, as well as an array of new excise taxes on utilities, telecommunications and alcoholic beverages.

Added together, the proposed taxes and fees would put San Diego at a disadvantage in attracting and keeping businesses, said Dan Pegg, president of San Diego Economic Development Corp., an agency charged with attracting jobs to the region.

“We have not only crossed the threshold in being able to attract businesses from outside but also in keeping local companies that want to expand,” Pegg said. “We are increasingly finding them looking elsewhere.”

Times staff writer Greg Johnson contributed to this story.