EDITORIAL: The new California Dream: Leaving

The new California dream is figuring out how to leave the state.

This fall, the Hoover Institute released a paper examining the exodus of corporations from the Golden State. It found 352 companies moved their headquarters from 2018 to 2021. The researchers believe the number is higher, but it’s hard to track the movement of smaller companies.

Some changeover is inevitable, but the pace of these moves is eye-raising. In 2018, 46 headquarters moved out of state. In 2019 and 2020, the number fleeing was in the 70s. Last year, it soared to 153. That’s more than 12 a month. The list of businesses moving included 11 of the 1,000 biggest U.S. companies. Household names such as Tesla, Oracle and Hewlett Packard Enterprise all of moved to Texas.

The Lone Star State was the most popular destination. One hundred and thirty-two of the companies moved there. Next was Tennessee at 31. Nevada ranked third, becoming the home to 25 companies escaping California. Florida and Arizona were next, taking in 24 and 21 respectively.

The pipeline of future business growth in California looks bleak, too. That’s despite its numerous advantages. California is the most populous state and has the third-biggest land area in the union. It has a strong system of higher education and ample access to ports for international shipping. Plus, the weather, diverse terrain and beaches are superb.

But California ranks just 16th in new capital projects. Per-capita, it ranks 46th, which is tied with North Dakota. On the per-capita list, Nevada ranks 35th.

This didn’t happen by accident. California progressives have enacted policy after policy that make it hard to do business there. The taxes are high. The regulations are oppressive. The permitting is costly. The Small Business &Entrepreneurship Council ranks California as the 49th-most “entrepreneur-friendly” state. Laws stack the deck against employers targeted by trial lawyers. Energy is expensive. The possibility of blackouts is a regular occurrence.

The quality of life keeps slipping. In many places, housing is unaffordable for most workers. Homelessness encampments keep multiplying. Crime is up. California usually has the highest gasoline prices in the nation. Now, it plans to ban the sale of new gas-powered cars by 2035.

Unsurprisingly, companies have generally moved to states that are much more business-friendly. Workers are better able to afford houses and fill their gas tanks, even if the weather isn’t as pleasant.

There’s an important lesson here for Nevada Democrats — and voters. California isn’t a model to imitate, but a slow-motion disaster to avoid.