Which would be counter to his earlier statements about wanting lots of people to succeed … reinforced by acts like making the supercharger network available.
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They choose to NOT pay the price to be located in a very-high tech region. They leave because they figure they do not need the very best in tech any more.
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That would at least help the California budget. With some 400K EVs sold in 2024, $7.5K per EV would cost the state $3 billion/year. If Tesla is excluded then the hit to the budget would be about 20% less.
The state, of course, is still running a budget deficit.
“… we view it as unlikely that revenue growth will be fast enough to catch up to ongoing spending…In our view, this year’s budget does not have capacity for new commitments, particularly ones that are ongoing.”
DB2
Spending more money in subsidies will help CA budget ? More spending means more taxes on hapless CA residents.
Companies are leaving citing high taxes and regulations
Toyota USA, Charles Schwab, Oracle, Hewlett Packard Enterprises, McKesson, Coremark, CBRE, Parsons, Neutrogena, and Blaze Pizza, Cacique Foods, Quickfee Solutions, Inbenta, Norwalk Frontier’s Communications, Thermonix, and Landsee Homes, Chevron and Phillips 66, X, SpaceX, Tesla, Palantir, HP
Excluding Teslas from the gravy train would help the California budget.
DB2
I don’t know if that list is significant or not but per the following, CA is ranked 30th in job growth with a gain of 1.2% YOY. By contrast, Florida is ranked 23rd with a gain of 1.4% YOY. Ohio, Wisconsin, and South Dakota are ranked 40th, 41st, and 42nd respectively all with less than 1% YOY. Rhode Island, with one of the higher tax rates, is ranked 13th.
I am not convinced that high or low taxes are the main drivers of job growth - or lack of.
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Taxes are way down on the list of what business looks for when deciding where to locate a production facility (not an administrative facility).
Since different industries need different resources and other factors for a production facility, there is no single rule for all of them. Availability of a local workforce is essential–unless the business is going to create a new town/city for its new location. Then the #1 issue is access to non-business resources for the workforce to enjoy outside the work environment. Very few companies would do this, but a few could rationalize such a venture if they could find/create a good location for the facility.
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It’s not just formal taxes that are considered “taxes” by owners of businesses. There are all sorts of other things that tax the business - mostly related to regulations, zoning approvals, construction approvals, etc. I know a guy that started a brewpub in Long Beach, CA, and it took 17 months before he could actually open to the public. That’s 17 months of rent, 17 months of hassle, 17 months of massive investment, etc. Every government agency that had to approve anything delayed his opening, over and over and over and over again.
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Your response doesn’t counter my argument. It supports it. CA is still growing jobs faster, with all of their heavy handed taxes and regulations, than many states with far less such. All else being equal, CA should be at the bottom of job growth. Instead, states with both lower taxes and a more friendly regulatory environment are lower.
In repeat of myself, I am not convinced that high or low taxes (or as you now illustrate, heavy regulations) are the main drivers of job growth - or lack of.
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Of course, but all else is not equal. CA has some natural advantages that can’t be equaled anywhere else. For example, it has the best weather in the country (with coastal San Diego having the best weather of the entire country). Another example is that CA is “newer” overall, on the east coast there’s a lot of very old infrastructure (both physical and human processes) that are slowly crumbling, while the west coast (CA) is mostly newer infrastructure. The humans in CA are more dynamic and less hidebound than the humans in NY and MA. There are plenty of other examples. All those good things combine to make CA a great place for business. However, as the bad things grow (taxes in part, but a bigger part is massive regulation that slows the progress of many businesses and increases costs dramatically), it is possible that CA growth will slow or even cease.
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Soooo, we are in agreement?
Yep, it appears so.
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I don’t know, are we?
However, as the bad things grow (taxes in part, but a bigger part is massive regulation that slows the progress of many businesses and increases costs dramatically), it is possible that CA growth will slow or even cease.
Absolutely. I have no argument as to what the future holds.
Pretending the companies leaving a state has no impact is silly. Growth slows, then stops and there is reversal in revenue. Negative feedback cycle starts.
Pretending the companies leaving a state has no impact is silly. Growth slows, then stops and there is reversal in revenue. Negative feedback cycle starts.
Sure. It’s true that 350 companies left the state between 2018 and 2021. That sounds ominous - right up until you include the statistic that 133,500 companies started, or moved to California in that same time period. If we’re to compare with Texas, the favored poster boy these days, we find that Texas added 90,900 businesses in that same time period, so , hooray?
If statistics count, California had by far the largest number of applications for new business from June ‘22 to June ‘23 (the latest period for which comparable figures are available), as applications increased by 46%. #1 of all 50 states.
Would you like more statistics? (Would it make a difference in your world view?) There were 567 venture capital deals around San Francisco alone last year, worth $16 billion. In second place: the entirety of New York State, with $5 billion.
Finally, I’ll just not that employment in the technology center is doing nicely in California:
Of course you can get cheaper housing and cheaper workers and less regulation is you want to move to Mississippi or similar. In fact that’s exactly what my Grandmother did when her husband died and she moved his Michigan factory to Alabama. She was bankrupt within two years. True story.
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I’ve been told of the imminent collapse of California for 35 years now. It’s just not going to happen. The state has too much going for it.
Exodus continues. People are holding on to yesteryear’s glories.
Didn’t they say they were keeping their HQ in San Francisco - that they’re just switching buildings? Not really an “exodus.”
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The Texas economic spring may be ending.
The “Texas Miracle” loses some of its magic as Oracle announces it’s moving its new HQ out of Austin and Tesla lays off nearly 2,700 workers. Texas Attracted California Techies. Now It’s Losing Many of Them.
It may in large part be a climate change thing with major insurers leaving the state, much like what happened in Florida. Texas is a leader in climate-based disasters.
Texas leads the nation in both the most frequent severe weather events and the most expensive, accounting for 15% of all U.S. billion-dollar disasters. Texas has the most billion-dollar disasters nationwide - Texas 2036.
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These days, it also may be a political thing … I wouldn’t want to subject a woman employee to Texas law these days.
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