PORTLAND - When Gov. Ted Kulongoski looks south to California, he sees a gold mine of opportunity for Oregon.

Kulongoski sent 250 letters to California businesses this week, asking them to consider relocating to Oregon, a state without significant political upheaval and lower workers' compensation rates, taxes and land values.

"It's always terrible when you take advantage of a sister state in difficult times, but the truth of it is, I've been talking to a number of people for some time about the advantages Oregon has as a place to do business," Kulongoski said Thursday. "We're not poaching, we're recruiting."

Oregon isn't the only state hoping to cash in on the Golden State's woes, which include the recent recall election and an $8 billion budget deficit.

Nevada, Arizona, Idaho, Oklahoma and New Mexico - to name a few - have courted California businesses in recent months by advertising in major publications, visiting company headquarters and making a flurry of mailings and phone calls.

Oregon, for one, is hoping that California businesses will be tempted by the state's political stability, significantly lower workers' compensation insurance and less restrictive overtime pay regulations.

Workers' comp costs have more than doubled for many California businesses, with average rates reached $5.05 per $100 of payroll last September, up from $2.27 in 1999, according to the Workers' Compensation Insurance Rating Bureau, a nonprofit industry association.

The state also passed legislation requiring businesses to pay employees overtime based on an eight-hour day instead of a 40-hour week. That means California companies now have to pay overtime to those working 12-hour swing shifts, even if they don't work more than 40 hours in a week.

"We've been shooting ourselves in the foot for awhile and there's no question about it," said Wayne Schell, president and CEO with California Association for Local Economic Development.

"The fact is our past governor and our legislature have caused a situation where we are scaring business out of California. There's no way to know how many businesses have left."

Kulongoski tells California business owners in his letter that Oregon has a "clean, green and healthy reputation" that favors business. Among other things, he writes, workers' comp rates are falling in Oregon due to reforms crafted in the early 1990s, and Oregon has low corporate tax rates and a streamlined government.

Marty Brantley, Oregon's director of economic and community development, said an increasing number of businesses are contacting Oregon on their own. Southern Oregon, in particular, has seen an increase in interest from everything from call centers to manufacturing and distribution operations.

Scott Ballo, Brantley's assistant, said the state hasn't compiled figures on the exact number of jobs that have migrated north, but estimated that up to two dozen California companies have set up in Oregon in the past year.

But some aren't so sure that Oregon, with its own shaky economy, is in a position to pitch itself as a business oasis. State lawmakers recently passed a budget-balancing plan that includes $800 million tax-increase package. Opponents of the plan are trying to collect enough signatures to force a Feb. 3 referendum on the package. Voter rejection would force lawmakers back to the drawing board.

And with a new governor, many in California and Oregon expect a renewed emphasis on keeping businesses in California. Kulongoski pledged to contact Governor-elect Arnold Schwarzenegger within several days to discuss both states' economic problems.

"He's got a tremendous task," Kulongoski said. "It's the most populous state in this nation and you have to do business with California in some form. I'm more than willing to sit down and talk to him about some of our mutual concerns."