California: The Land of Double Taxation for Small Businesses

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

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 […]

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California’s ‘Score’ for Business Deteriorates

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

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 […]

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Time for California to End the Texas Bashing

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

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 […]

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Welcome Texans!

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

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 […]

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Stunning: California Imposes 5-Year Retroactive Tax Bill on Startup Investors

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

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 […]

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California Politicians Owe Golfer Phil Mickelson an Apology

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

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 […]

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California’s Absurd High Speed Rail Project Is Perfect Model for Fictional ‘SpeedRail’

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

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 […]

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Calif. Business Departures Increasing — Now Five Times Higher Than In 2009

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

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.

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Employees Now Asking Companies to Leave California

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

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:

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Record in 2010 for Calif. Companies Departing or Diverting Capital

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

In the seven weeks since the last report, another 11 companies have left California completely or re-directed substantial capital to build facilities out of state that in an earlier era would have been built here. The number in today’s list is lower than the usual four-per-week average and I believe it’s because companies shy away from making such announcements during the end-of-year holiday season.

The names of the companies and justifications for listing them appear in the list below, which builds upon the Dec. 6, 2010 entry regarding 193 companies here (which in turn builds on previous lists).

In brief:
Company total for 12 months of 2010: 204
Company total for all of 2009: 51

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