WHY ARE COMPANIES LEAVING CALIFORNIA
article by: James Thomas Fridas
Joseph Vranich has been writing about California companies leaving California for several years now and he has come up with some amazing finds as far as I can see the following facts should inform you why the situation is critical and getting worse by the day, read on and see what I see.
Many organizations and companies provide reasons why companies leave California. Included below are some shocking findings, updated in light of recent studies and reports by informed sources.
The #10 Reason (New!) – Unprecedented Energy Costs: The California Manufacturers and Technology Association states that commercial electrical rates here already are 50% higher than in the rest of the country. In April 12, 2011 California enacted another one of their insane laws which requires utilities to get one-third of their power from renewable sources (e.g., solar panels, windmills) within nine years. Look for costs to increase by as much as 19% in many places to a whopping 74% just in the city of Los Angeles. These kinds of new burdens along with upcoming regulations stemming from the “California Global Warming Solutions Act” the California what? Set potentially overwhelming obstacles to companies here as they try to meet competition based in other states and in foreign nations, and the politicians in Sacramento are oblivious to these situations as though they are in a kind of stupor or fog, how does just plain drunk sound?
#9 – Severe Tax Treatment: When we say severe consider amputating you arm without any pain relief! The Tax Foundation in their 2011 State Business Tax Climate Index lists California at No. 50 for tax fairness. CFO Magazine ranked California the worst state for tax treatment, in fact they consider a move to Venezuela beneficial compared to California. The Council on State Taxation ranks California as the only state to receive a D- grade (the lowest grade). Last year the National Conference of State Legislatures said California remains the number one state in raising taxes – raising them higher than any other state that increased taxes in 2009.’ Texas loves the fact that California is giving them so much new business and work for its citizens.
#8 – Worst Regulatory Burden: The consulting firm Bain & Co. constructed a “regulatory hassle index” that found "California is far worse than any other state by a very significant margin." This finding was echoed by Development Counselors International that found that 77% of surveyed corporate executives listed California as having the “worst business climate” throughout the entire nation as a whole! The newest survey, released in March 2011, found that 87.7% of California executives who also operate in many states say California is the worst place to do business than any state in the nation. The survey, by the California Foundation for Commerce and Education, found that among the other 12.3%, not one executive said it’s easier doing business in California.
#7 – Dreadful Legal Treatment: The Civil Justice Association of California said the state ranks 44th in legal fairness to business. Los Angeles was again named the least fair and reasonable litigation environment in the entire country. They have a lot of people in Los Angeles but most of them are on welfare or some form of government subsidy they could care less that California is sinking and stinking at the same time!
#6 – Most Expensive Business Locations: The Rose Institute of State and Local Government in its 2010 survey also reported that California cities continue to be some of the most expensive locations to do business in the United States. That was confirmed by the Milken Institute, which found that California businesses are paying 23% more than the national average just to operate here. So does this answer some of your questions why business is leaving, read on.
#5 – More Profits Elsewhere: Again Bain & Co. found that more than half of California business leaders – an astonishing 60% – said their policy is to restrict job growth in the state or move jobs to other U.S. locations. Some companies are quite open about this, like Intel, which has said it will never build another plant in California, and McAfee in 2010 admitted it intentionally avoids hiring in California and saves about 30 to 40% every time it hires outside of the state.
#4 – Downright Unfriendly: The Small Business & Entrepreneurship Council in Virginia found that California ranked 49th overall in terms of business friendliness. A business leader said in a report that he was inspected by a person from the EPA and was rude, contemptuous nasty and combative the entire time he was there from when he entered until he left and that was just one reason he said why his company is leaving California and moving to Arizona. That was echoed in February 2010 when The Mercatus Center at George Mason University ranked California 48th overall in what we expect from the constitution freedom and personal liberty, of course you can smell socialism there.
#3 – Out Of Control Legislature: Extravagant spending causes California to now have the lowest credit rating of any state and getting lower. The American Legislative Exchange Council pointed out the following: "Despite the dubious distinction of having both the highest statewide personal income tax and the highest state sales tax in the nation, California still finds itself with far and away the largest budget deficit of any state." Plus Jerry the clown is planning to ask California voters to raise taxes in November of 2012, so much for a balanced budget!
#2 – Excessively Adversarial: For two years in a row Chief Executive magazine found California to be the worst state in the nation in which to do business. One CEO stated, “California is terrible. Even when we’ve paid their high taxes in full, they still treat every conversation as adversarial. It’s the most difficult state in the nation.” The magazine calls California the “Venezuela of North America.”
#1 – The ‘Outpouring’ of Poor Rankings Continues: California ranked dead last in the latest Pollina Corporate Top 10 Pro-Business States for 2010 study. The finding was based on a composite of labor-related factors, business and personal taxes, the litigation environment, demographics, crime rates, school dropout rates, lifestyle and a multitude of other issues. There is little evidence that California’s business environment will improve considering that 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.
For an in depth look at some reports go to LiveScience.com in 2010 report that California ranks 46th on a national "Happiness" list. The political culture – impacted by radicalized, powerful, anti-business interest groups – causes many problems for those in California who attempt to attract and retain businesses. The bureaucrats are continuing the assault on business and California will have to go bankrupt if Jerry the Clown does not get his tax increase and I would say in either event that if he does expect to see more businesses leave California so they can kick the proverbial can down the road but eventually someone will have to pick up the tab or go belly up, and welfare won't cut it when all businesses have left the state, then who pays the tab, citizens who have to work for a living, oh oh, but there won't be any jobs so bankrupt it is!
