NEVADA FIGHTING ARNOLD FOR JOBS.

Byline: Evan Pondel Staff Writer

The state of Nevada rolled out a $650,000 advertising campaign in California on Wednesday, attempting to lure businesses that are disenchanted with Gov. Arnold Schwarzenegger's economic muscle.

The advertisements are running throughout the state with the caption ``Will Your Business Be Terminated?'' Behind the caption is the image of a beat-up worker, with a fat lip and a black eye. The campaign's slogan: ``Nevada to the Rescue.''

Lackluster tourism is driving the desert state to diversify its economy. Instead of more high-rolling casinos, Nevada is betting on biotechnology and other industries for future riches.

``The California business community is in trouble. And we want to be the state businesses think about when it comes to a future home,'' said Somer Hollingsworth, president and chief executive officer of the Nevada Development Authority.

Last year, approximately 40 California companies relocated or expanded operations in Nevada, resulting in 1,500 new jobs. In 2002, about 20 businesses moved to Nevada from California. Among the temptations: Nevada has no corporate income tax, no personal income tax and no inventory taxes.

Other states are also touting their tax appeal. South Dakota, Florida, Alaska, Texas and New Hampshire are five of the states that began 2004 with tax systems most beneficial to business, according to Washington, D.C.-based Tax Foundation. Nevada - at sixth place - is also in the top 10. California ranks 38th.

``There is a real threat from competitors all over,'' said Jack Kyser, chief economist with the Los Angeles Economic Development Corp. ``But as far as Nevada is concerned, they may talk about a more business-friendly environment, but they don't talk about their labor pool and how deep it is.

``Transportation costs are also higher, and if the top airline is Southwest, companies are not going to be able to put a lot cargo in the belly of a 737.''

That's not stopping Nevada.

The state already has advertising in place at the corner of Hollywood Boulevard and Vine Street.

If a high-profile push to lure business away sounds familiar, it is. Schwarzenegger drove a moving truck up and down the strip in Las Vegas in August as part of a nationwide advertising campaign with the slogan ``California Wants Your Business.''

A spokesman for Schwarzenegger - who visited a film set in Altadena on Wednesday to thank the producers for keeping jobs in California - is unmoved by Nevada's effort.

``And he is not interested in getting into a bidding war for jobs,'' said spokesman Vince Sollitto. ``It's about improving the California business environment and spreading the word that California is business- friendly.''

Evan Pondel, [phone]

evan.pondel(at)dailynews.com

WORTH A GAMBLE?

What the Silver State has to offer:

--No corporate income tax

--Workers' compensation insurance rates at least 30 percent lower than in California

--Utility costs 25 to 35 percent lower than California

--Nevada's Family Medical Leave Act gives employees three months compared with seven months in California

--Real estate prices are at least 50 percent cheaper when compared with property in California's major cities

CAPTION(S):

2 photos, box

Photo:

(1 -- color) Somer Hollingsworth, head of the Nevada Development Authority, shows off a sign in his state's campaign to lure away California jobs.

Reed Saxon/Associated Press

(2 -- color) California Gov. Arnold Schwarzenegger visits Las Vegas in August in his Arnold's moving van - symbol of his campaign to attract businesses from Nevada.

Joe Cavaretta/Associated Press

Box:

WORTH THE GAMBLE? (see text)