California is considering imposing the most ruthless set of taxes ever placed on businesses in the state’s history – a tsunami of levies that may trigger the worst raid on private-sector finances ever organized by the state’s politicians. One result will be an increasing number of businesses leaving California for greener domestic or international pastures. […]
Just think: You run a business. Your partner embezzles from you and you are reeling – you feel like you’ve been punched in the gut. Next, California’s state government shows up and slaps you around. When you object, Sacramento offers no apology, no comfort. You’re on your own. Farfetched? Read on to see what happened […]
Down again. That’s what we can say about California’s “business attractiveness” as its lost is tenth place ranking in a survey of site consultants, published yesterday by Area Development Online. Here is what Editor Dale Buss had to say about the state losing the ranking it had in last year’s survey: “The state’s reputation with […]
As a corporate site selection consultant, my world is buzzing about the big Toyota move from Torrance to Plano, Texas. My peers and I know full well how company employees will have to seriously consider their options and how Torrance’s treasury will be affected. But some of us are irritated with the nonsense coming from […]
This is an open letter to Texas Gov. Rick Perry and his Economic Development team visiting California this week. Their goal is to interest businesses in relocating to their state or at least selecting Texas as the place in which to expand. Dear Governor Perry and Delegates: As you’re fix’in to come out here, I’m […]
Thanks to an entrepreneur, Brian Overstreet, we in California are just starting to learn that the state Franchise Tax Board has cancelled the Qualified Small Business (QSB) tax benefits and is retroactively denying the benefits for the past five years. Overstreet explained in a column in Xconomy that the QSB was designed to incentivize people starting […]
Political correctness in California has become so bizarre that a high-achieving citizen paying huge amounts in taxes is ostracized if he even mildly complains about those taxes. Pro golfer Phil Mickelson has suggested “drastic changes” were in store for him – including possibly moving out of California – because of changes in federal and state […]
Co-author of the Reason Foundation’s 2008 study, “The California High Speed Rail Project: A Due Diligence Report”, whose warnings about the project have over time proven to be accurate. Rarely has one promotional blurb on a book jacket hooked me into immediately opening the pages and reading late into the night. However, this one line […]
Since the beginning of this year, California has experienced 129 disinvestment events, an average of 5.4 per week. Comparing this year thus far with 2009, when the total was 51 events, essentially averaging 1 per week, our rate today is more than 5 times what it was then.
Hence, 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.
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.
If I hadn’t heard it from clients I wouldn’t have believed
it – Californians are asking their companies to leave the state.
Some time ago a decision-maker told me he had evaluated the
benefits of moving his department out of Los Angeles. He said: "When I
discovered how substantial the savings would be, I quipped in front of my
staff, ‘We should move to Texas.’ I was surprised by what happened next –
people approached me one by one, came in my office, closed the door, and asked
that we move to Texas. Once I saw the employee reactions, I’d like for the
relocation to occur."
Businesses relocate generally for cost factors (taxes, the
burdens of excessive regulations, high rents) but people move for life-style
reasons. Here is a sampling of employee motivations: