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Shocker: California Businesses Voting With their Feet and Leaving the State

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The $5 Million a Year San Francisco Tax Break

Twitter notwithstanding, California for many years has not been business friendly and now the businesses are giving up and simply either leaving or expanding in other states.

Buffeted by high taxes, strict regulations and uncertain state budgets, a growing number of California companies are seeking friendlier business environments outside of the Golden State.

And governors around the country, smelling blood in the water, have stepped up their courtship of California companies. Officials in states like Florida, Texas, Arizona and Utah are telling California firms how business-friendly they are in comparison.

Companies are “disinvesting” in California at a rate five times greater than just two years ago, said Joseph Vranich, a business relocation expert based in Irvine. This includes leaving altogether, establishing divisions elsewhere or opting not to set up shop in California.

“There is a feeling that the state is not stable,” Vranich said. “Sacramento can’t get its act together…and that includes the governor, legislators and regulatory agencies that are running wild.”

The state has been ranked by Chief Executive magazine as the worst place to do business for seven years.

“California, once a business friendly state, continues to conduct a war on its own economy,” the magazine wrote.

That is about to change, at least if Lieutenant Governor Gavin Newsom has anything to say about it. Newsom is developing a plan to address the state’s economic Achilles heels, and build on its strengths. It will be unveiled at the end of July.

“California has got to get its act together when it comes to economic development and job creation,” he said.

While not all companies investing elsewhere are doing so for economic reasons, some are shopping around for lower costs, lighter regulations, stable leadership and government assistance and incentives.

The most popular places to go? Texas, Arizona, Colorado, Nevada, Utah, Virginia and North Carolina, said Vranich. All rank in the Top 13 places to do business, according to Chief Executive.

California has great weather and ample natural resources, but the far left Democratic nature of its politics is stifling to business.Unemployment is high and entitlement costs associated with this and rampant illegal immigration are a definite drag to business development.

I do not foresee the California business climate improving anytime soon. No matter what former Democratic Mayor of San Francisco Gavin Newsom says or creates with Nanny State commissions, businesses are voting wit their feet and leaving.

California’s economy will stagnate much like Michigan’s with little or no growth and for the forseeable future.

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