Another Small Business Says ‘Adios’ to California – Mine

Joseph Vranich
Principal of Spectrum Location Solutions helps companies plan and select ideal sites for new facilities across the U.S. and internationally.

If I’m known for anything in California, it’s been for my studies about companies leaving the state because of its punishing tax and regulatory policies. Sadly, new political antics will likely cause my future reports to reflect further deterioration in the state’s business climate.

I say that because a new California Tax Foundation analysis found that lawmakers this year have introduced 33 measures that, if enacted, would hit individuals and businesses with tax and fee increases of about $269 billion annually.

As I look at the actions of legislators in Sacramento – most of whom have never run a business – I see no tax relief in the future. If out of this legislative avalanche only a few new business taxes pass, I believe more companies will leave the state.

When corporations like Toyota, Nestle USA and Hilton Hotels move their headquarters out of California, journalists rush to interview employees at the doors of soon-to-close facilities.

But small businesses relocate out of state all the time and the media rarely notice. Hence, I’ll go out of my way to draw attention to my departure from Irvine – where I ran my business for ten years – to Cranberry Township, a growing suburban community near Pittsburgh.

In running my site selection consulting practice, I’ve identified favorable out-of-state locations for California-based firms. The more I experienced greener pastures elsewhere, the more I was interested in moving to take advantage of benefits that are increasingly elusive in California.

I admit that tax planning was a big motivation for my move. Pennsylvania’s flat income tax rate allows my family to save a considerable sum compared to California’s progressive system. Sales taxes, real estate taxes and car taxes are lower, too.

I’ll have greater freedom in my business now that I can ignore California’s notorious regulatory environment – one that is so bad I can be sued if I have a mere typo on a paycheck stub.

Moreover, although I’ve always treated clients and contractors with great respect, I nonetheless knew that I could be victimized by threats of frivolous lawsuits – lawsuits that would be laughed out of court in other states.

There are California elitists who consider Pittsburgh to be part of flyover country. Too bad for them that they don’t know its attributes.

It’s amazing how friendly everyone is here. I think that Pittsburgh, although technically not part of the Midwest, is where the Midwest begins because of the openness and warmth shown by people in all walks of life.

Some will find this news stunning: We are enjoying a quality-of-life in Cranberry Township that is superior to what we had in Irvine.

We bought a new house larger than what we had for about half the cost. Although the home is bigger, our insurance cost is 30 percent lower. And we can afford to engage in more activities because the cost-of-living in Cranberry Township is 44 percent lower than in Irvine.

Many Californians are worried about costs. Statewide, 58 percent of Millennials and 65 percent of parents echoed the sentiment that “I am considering moving away from California because of the high cost of living,” according to a recent poll by the PR firm Edelman.

Oh. And the highways here are far less congested.

Gov. Jerry Brown’s economic development spokesperson, apparently unable to resist mocking other states, once said few companies would leave California for “desolate locations” elsewhere.

Well, this area is the opposite of ‘desolate.’ Pittsburghers are justifiably proud of their neighborhoods, cultural attractions, sports teams, scenic vistas, charitable organizations and foundations, and transformation to a place where more than 10,000 innovative tech firms call home.

As I settle into my new Cranberry Township home, I ask myself, “What took me so long?”

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