Looks like California’s tax-and-spend politicians have been effectively digging the grave of their State’s economy. Casey Research links to Joseph Vranich, who reports:
Today, California is experiencing the fastest rate of disinvestment events based on public domain information, closure notices to the state, and information from affected employees in the three years since a specialized tracking system was put into place.
. . .
Our losses are occurring at an accelerated rate. Also, no one knows the real level of activity because smaller companies are not required to file layoff notices with the state. A conservative estimate is that only 1 out of 5 company departures becomes public knowledge, which means California may suffer more than 1,000 disinvestment events this year. The capital directed to out-of-state or out-of-country, while difficult to calculate, is nonetheless in the billions of dollars.
The top five destinations are:
- Texas;
- Arizona;
- Colorado;
- Nevada and Utah tied; and
- Virginia and North Carolina tied.
Based on the legislature’s recent rejection of business-friendly legislation and Sacramento’s implementation of additional regulations, signs are that California’s hostility towards business will only worsen.
California is such fertile ground that representatives for economic development agencies are visiting companies to dissect our high taxes, extreme regulatory environment and other expenses to show annual savings of between 20 and 40 percent after an out-of-state move.
Officials from 14 states are making such presentations, namely: Arizona, Colorado, Florida, Georgia, Indiana, Louisiana, Nevada, North Carolina, Pennsylvania, South Carolina, Texas, Utah and Virginia – and Ohio is soon to be packing their bags for visits here. These are only the ones I know about; there may be others. Even the states that aren’t visiting are emailing, calling and sending letters to solicit California companies to move outright or select an out-of-state location when expanding.
There’s more at the link.
The decision-makers at the companies were interviewed and asked what factors led to a determination to leave the state or redirect investment. Not surprising that, again, taxes and regulatory burdens rank as a significant deterrent. Other incentives to look outside the state include: expensive location; dreadful legal fairness to business; and an excessively adversarial business climate. Chief Executive magazine calls California the “Venezuela of North America.”
And as if it was needed, a new incentive for businesses to leave the state was enacted on April 12, 2011, in the form of a new law requiring utilities to acquire one-third of their power from renewable sources within nine years. California is already home to electricity rates twice the national average. Rates are estimated to increase from 19% to 74% when the new regulation is fully implemented. Further, the upcoming “California Global Warming Solutions Act” has the potential to place overwhelming hurdles that do not exist in other states and countries in front of local companies.
The good news is that California continues to set the standard on how not to run a state. It’s an example that other states are paying attention to and plying the dunderheaded decisions of California legislators to their advantage. Free-market competition between states for business investment, and hence jobs, is under way, and will absolutely intensify as budget deficits squeeze a growing number of U.S. states.
A similar scenario is likely in play for individual California taxpayers as well, although statistics on this are hard to come by. As employers flee the state, it seems logical that job seekers will follow. And as the tax burden for funding government grows faster than the tax-paying population, look for a greater number of taxpayers to become former California taxpayers. The time for dreamin’ is long past. It is the dawning of a new tax age for state governments.
Again, more at the link.
Looks like, in business terms, California’s a good State to be . . . from.
Peter
I don't want to sound like a member of the tinfoil hat brigade, but this just occurred to me while reading the article:
If the fedgov can, on behalf of the union, order a company not to expand to a right-to-work state, couldn't they, on behalf of the stategov, order a company not to move to a capitalist state?
Sometimes it makes ya wonder – where's it all gonna end?
MichigammeDave
The only surprising thing is that it is taking so long for some people to figure it out. I'm slow but I looked at the mix of regulation, taxes, housing costs, and sheer numbers of people and decided to leave the state six years ago. It took half a year to find a suitable business to purchase in a mountain state. I've been back twice; both times because of the death of my father.
Another thing to consider is the people get the government they deserve/vote for.
And now that CA is going toes up, DRT (dead right there), all the people who voted for that kind of government are moving to other states. I live in CO, and one of our biggest pet peeves are people moving here from CA (and NY/NJ and elsewhere) and bringing their nanny-state mindset with them. It won't be long before we have the same stupid laws because the influx of idiots keep voting for more nanny-state government like they used to have "back home," instead of realizing that such stupid laws were the reason they had to leave in the first place.
Shrimp, it's really easy to pop off with generalized criticisms such as people getting what they deserve or vote for, but that's a load of crap. I and a hell of a lot of other people, many of whom don't sit back and watch but instead are active in their communities, did NOT vote for Obama, his appointed czars, or many of the representative critters within the beltway. We are nevertheless stuck with the whole sorry lot. So I for one do NOT deserve, nor did I vote for, ANY of those idiots. According to your comment, there are hundreds of thousands of people in this country who though unsatisfied, got what they deserved — and you haven't a clue how they voted. I have to wonder if you are one of them yourself, or if you are an Obama supporter and are therefore a happy camper.
I'm sure there are quite a few Californians who are in the same boat regarding their state politicians, and I KNOW many have put much time and money into Second Ammendment issues there, only to be drowned out, ignored, or overruled.
I guarantee you that here in Florida we are stuck with the results of the electoral system, as are the citizens of every other state. That's how the system works — we DON'T always get what we deserve or vote for. THAT is the real world.
PETER: My apologies if I've gone over the edge here. Hit that Delete key hard if I have. It just burns me up when people throw accusations out like confetti.
I have heard that "deserve" statement and, unfortunately, I have also used it at times. However, I, also, live in CA and did my level best to remove Boxer and Pelosi last year, to no avail. The unions in this state have a stranglehold on us and have so much money to throw around during campaign time, it is utterly incredible. Why do you think we are broke??
Several years ago we put our house on the market, only to watch in horror as the the bottom dropped out, and no one wanted our acreage, never mind the house on it!
Our son-in-law lost his job when his company was continually underbid by companies using illegals. He was unemployed for two years, then had to take 20K pay cut in order to get a non-union job.
No, we did not deserve this, those of us who worked and are still working to elect responsive/ible politicians. And, Arnie DID do his best, and could not get past a well-organized lib voting block.
I do believe that some of us deserve an apology.
@Bob–
Uh, no. I am not now, and never have been and never will be a supporter of the Teleprompter in Chief.
And unfortunately, I do have a clue as to how they voted. Mostly because they told me, and now a few of them even regret it.
But that was my frame of reference for the people who moved here to escape too much taxes or government waste and then voted for more of the same of what they had just left. I know these people. They aren't abstract numbers, but neighbors, fellow members of my church, co-workers etc.
But, you go on to make my point with "I'm sure there are quite a few Californians who are in the same boat regarding their state politicians, and I KNOW many have put much time and money into Second Ammendment issues there, only to be drowned out, ignored, or overruled."
In other words, the majority of idiots out-voted the rest of us, and continue to vote for the free hand-outs. We are suffering for their selfishness and short-sightedness and general stupidity.
Do I mean to say that all of us get the government we deserve? Of course not, but my point (as trailbee pointed out by stating that he/she sometimes even has said it) is that the idiots (the majority) are getting the government they wanted.
Go read the comments on any article on Yahoo that mentions Sarah Palin or Bush II and you'll see exactly what I mean.
Does it paint with a broad brush to say it so bluntly? Yup, and I am sorry if it offended you. (As it would offend me, if someone were to suggest that I participated or somehow failed to prevent our current mess when in fact I have voted against it/ rallied against it at every turn.)
My comment wasn't intended to offend those on our side of the fence, but to point out that if the majority is voting for free stuff from .gov, and for Big Brother to watch over them day an night, they really can't complain that Big Brother is getting too nosy or that the free stuff isn't as good or as plentiful as it used to be.
Again, I apologize.
I think I did a couple of back flips there and am sorry. 🙂 Feinstein comes up for re-election next year and there is no way to unseat her! She singlehandedly wrecked the economy in the Central Valley for the last two years, but you do have a point, because she keeps getting elected by well-heeled libs and people who are enjoying their entitlements. In addition, Amazon has just dropped all CA sellers. I'm at a loss. Thanks for the op to discuss. Biene