California Leavin’: Why California Business Moves

California Business

California Business, Jerry Brown

Even with people having to pay the “sunshine tax”, the extra money you pay to live in Cali due to the weather, 72 degrees with a slight breeze, there has always been a plethora of citizens willing to move in. There is something about waking up in February and being able to go to the beach rather than shovel your driveway that appeals to people. Go figure. I was taught in college in 1986 that 60,000 cold bodies moved to California annually. This was due to people back east turning on the Rose Parade and seeing the bright sunshine and happy people every new year’s day. Hal would turn to Vivian and tell her to pack up, they were moving. Understandable. And for most of my life that had been true.

That is certainly not the case anymore. I recently read an article that solidified my opinion as to what has been going on in my home state the last decade or so. It read that 9,000 companies had left California in the last 7 years. 9,000 COMPANIES. This is just tragic. I knew businesses were leaving, I just didn’t know the magnitude. But after looking at what a business has to put up with,  I certainly wouldn’t set up here. So, why is this happening? Simple. Big Government. Governor Brown has regulated and taxed businesses right out of California. The cost of operating a business here is so prohibitive that execs would rather absorb the cost of packing and moving the entire company than stay. I can’t blame them. The study reported that companies could save between 20-35% in operating cost annually by moving to Texas. On a million dollar operating cost budget, that’s between 200K and 350K. In one year.

California business escape

California business regulations

How bad is it really?  The state ranked 48th in the Tax Foundation’s State Business Tax Climate Index for 2015. The Golden State boasts the third highest business and local business tax in the nation.  Farmer Brothers (coffee) is following Toyota out the door, whose U.S. sales and marketing headquarters was barely a mile from the company’s main office, and has gone to Texas. Raytheon Space and Airborne Systems, eBay, Occidental Petroleum, and firearms retailer RifleGear followed them. Nissan bailed to Tennessee. Jamba Juice just announced last week they are also going to Dallas.

California lands at the bottom of virtually every list that ranks the state’s business climates. Rating California 49th on a list of “free states,” the Mercatus Center at George Mason University observes that California “ranks last in “Regulatory Freedom” and 49th in “Occupational Licensing” regulations.

California business worst place

Not until there is new leadership in Sacramento or the State loses so much money because of the loss of business and people will there be a change. Brown continues to chirp that there is no crisis and we shouldn’t worry. The only reason that this has not become a full-blown crisis is Silicon Valley. The Valley has produced big numbers for the state, some what mitigating the losses. But let’s call it for what it is. Bad leadership.

California business worst tax

With the onset of a $15 an hour minimum wage coming soon, the exodus will continue unabated.

Do you agree? Let me know.