BATTLE OF THE BILLBOARDS MASSACHUSETTS GOVERNOR FIGHTING STATE AND SCHWARZENEGGER FOR JOBS.

Byline: David M. Drucker Sacramento Bureau

Gov. Arnold Schwarzenegger's quest to take jobs and businesses away from other states drew a sharp reaction Wednesday from fellow Republican Gov. Mitt Romney of Massachusetts, who started fighting back with his own billboards in California cities.

Romney's ad, bearing his own image, encourages California businesses to relocate to Massachusetts, where taxes are lower.

``We take these encroachments seriously, and in this case we're fighting fire with fire,'' Romney communications director Eric Fehrnstrom said in a telephone interview from Boston.

The Schwarzenegger billboard, part of California's ad blitz to lure jobs from other states, shows the bodybuilder-turned-actor smiling with his muscular arms crossed. The caption is: ``Arnold says, California wants your business.''

Romney's billboard features an arms-crossed Romney with the slogan: ``Smaller muscles, but lower taxes! Massachusetts means business.''

Romney's first sign went up Wednesday in San Francisco on northbound U.S. 101 near Hillsdale Boulevard, with others to be unveiled soon in San Diego on eastbound Interstate 94 near downtown and in Los Angeles, greeting travelers entering Los Angeles International Airport.

Romney and Schwarzenegger both are popular Republican governors of largely Democratic states who amassed wealth in the private sector before entering politics.

Romney's ads, at a monthly cost of $20,000, are scheduled to stay up for at least 30 days.

Nevada, meanwhile, is poised to launch a $700,000 marketing campaign encouraging California businesses to relocate there, according to a spokesman for Schwarzenegger's privately-funded Commission for Jobs and Economic Growth.

The Schwarzenegger billboards are part of his multi-state, multi-country marketing campaign designed to attract businesses, jobs and foreign investment to California. Billboards are up in almost a dozen cities, including Las Vegas, Phoenix, Portland, Atlanta and Chicago, and more are scheduled to follow.

``The Massachusetts campaign is just drawing out into the open what Gov. Schwarzenegger has said repeatedly: Other states want our jobs and for too long, California was an easy mark. Now we're fighting back by improving the state and letting other states know we want their business,'' spokesman Vince Sollitto said.

The Massachusetts governor decided to counter with his own billboard campaign after seeing the Schwarzenegger ad in Boston near Logan International Airport. Romney appreciated the billboard's creativity but nevertheless was ``annoyed,'' his spokesman said.

``In Massachusetts, we don't treat our employers like economic girlie- men,'' Fehrnstrom said, referencing a line Schwarzenegger has used to ridicule Democrats who opposed his fiscal agenda.

``Our taxes are relatively low, access to capital is plentiful, our economy is on the move, and because of our colleges and universities, we have more brain power than any other state in the nation.''

The Romney administration cites lower personal-income and sales-tax rates - 5.3 percent and 5 percent, respectively in Massachusetts compared to as much as 9.3 percent and around 7 percent in California - and lower workers' compensation insurance rates among what it sees as the commonwealth's many advantages over the Golden State.

The Schwarzenegger administration, noting the workers' compensation reform package it pushed through the Legislature earlier this year and the governor's handling of the budget crisis, expresses confidence that businesses will opt for California as the word gets out the state's business climate is improving.

Jack Kyser, chief economist for the Los Angeles County Economic Development Corp., said Romney's billboards are likely to have minimal impact, if any. Even Schwarzenegger's billboard campaign is more valuable as a newsmaker than a job creator, Kyser said.

``I think it looks good. It sends the message that California is more user friendly. The key thing is what's going on in the trenches.''

David M. Drucker, [phone]

david.drucker(at)dailybulletin.com