Truth Before Dishonor

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Moving From California To Texas?

Posted by John Hitchcock on 2012/04/19


You’re not alone. For several years, California businesses have pulled up stakes and moved to Texas. Here are a couple quick videos featuring Andrew Puzder, CEO of CKE restaurants (that’s Carls Jr, and Hardees), a multi-billion-dollar business that moved from California to Texas, very briefly touching on some of the reason why.

As I said, the business exodus from California has been ongoing for several years. Here is a video from mid-October, 2010, noting that over 150 businesses had fled California up to that point in 2010 alone, and that it was a continuing occurrence and not the start of the flight.

A business that spent 42 years in Orange County, California, moved to Corpus Christi, Texas in 2011. The main reason cited? Taxes and fees.

The businessman’s Texas building has double the square footage at a quarter of the cost.
His corporate truck registration fee is 1/7 the cost it was in California.
His electric bill while running the air conditioning for a full month in Texas is less than 1/3 the average bill in California.
California charges sales tax on leased equipment, unlike most states. Every month of the lease, there’s another month of sales tax.
When California residents put a cap on property tax increases, California Government officials just switched to skyrocketing fees, such as Orange County’s sewer connection fee, which went from 50 a year to 800 a year, a 16-fold increase.
In the same time-period, his fee for a business license nearly doubled.

In other words, California made it far too expensive to remain. Do read the above-linked article.

The Orange County Register reported 69 businesses had moved all or part of their businesses out of California between January 1, 2011, and April 15, 2011, a rate exceeding it’s 2010 pace, according to a firm that had been tracking the exodus since 2009. The OC Register cites Joe Vranich, a relocation consultant, who gives a Top Ten list of reasons why businesses are fleeing California:

Why do these and the other companies move out of California? Vranich has updated his top 10 reasons that California companies call the moving van.

No. 10 is new: Energy costs soaring because of new laws and regulations. Commercial electrical rates are already 50% higher than the rest of the country, Vranich says, and Gov. Jerry Brown just signed a new law increasing the amount of power utilities must buy from renewable sources plus regulations for the California Global Warming Solutions Act will start soon.

The other reasons, Vranich says, are:
9. High and unfair tax treatment
8. Regulatory burden
7. Unfriendly legal environment for business
6. Most expensive place to do business
5. Provable savings elsewhere
4. Public policies and taxes create unfriendly business climate
3. Uncontrollable public spending
2. More adversarial toward business than any other state
1. Poor rankings for California on lists ranging from taxes to crime rates to school dropout rates.

“There is little evidence that California’s business environment will improve considering that the legislature in 2011 has voted down litigation reform, tax-increase plans are underway, and a host of new regulations are to be implemented that will increase costs for literally every business,” Vranich says.

California is shedding business because California is making it increasingly cost prohibitive to operate a business within its borders. And that means California, a very high-tax state, is losing massive amounts of tax revenue — and jobs. All while California continues to profligately spend money like there’s no tomorrow. California Legislators and other government officials even came down here to Texas to find out how Texas is luring businesses away from California.

When California politicians want to visit California jobs, they increasingly have to leave California to do so. That’s why Lt. Governor Gavin Newsom traveled with a small entourage of other Golden State politicians to Texas, the biggest beneficiary of California’s economic policies. So many jobs have fled California to Texas, John Fund writes for the Wall Street Journal, that the governing class needed lessons from Texas Governor Rick Perry on how not to repel business:

“We came to learn why they would pick up their roots and move in order to grow their businesses,” says GOP Assemblyman Dan Logue, who organized the trip. “Why does Chief Executive magazine rate California the worst state for job and business growth and Texas the best state?”

The contrast is undeniable. Texas has added 165,000 jobs during the last three years while California has lost 1.2 million. California’s jobless rate is 12% compared to 8% in Texas.

“I don’t see this as a partisan issue,” Mr. Newsom told reporters before the group met with Texas Republican Gov. Rick Perry. The former San Francisco mayor has many philosophical disagreements with Mr. Perry, but he admitted he was “sick and tired” of hearing about the governor’s success luring businesses to Texas.

And, of course, businesses aren’t all that’s fleeing the People’s Republik of Kalifornia. People are, too.

The Top Three states in tax revenue lost (1999 – 2009) due to people moving away:
New York
California
Illinois

The Top Three states in tax revenue gained (1999 – 2009) due to people moving in:
Florida
Arizona
Texas

While New York, California, and Illinois all have very high income tax rates, Florida and Texas have no income tax.

For those of you moving from California to Texas (really from any Leftist state to Texas), The Grouch at Right Truth has a little language translation aid for you.

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