California Businesses Vote With Their Feet
According to this report, 204 businesses left California for greener less green pastures in 2010. That is up from the 51 businesses which left in 2009. This certainly won’t help tax revenues that California so desperately wants (though not enough to tax marijuana sales).
Mark this down as one of the many reasons why it isn’t a good idea to dig your state into a nearly inescapable fiscal hole. Their budget deficit is projected to be $19 billion dollars, with annual unfunded pension liabilities potentially reaching $80 billion by 2012, and a lawattempting to curb greenhouse gas emissions.
This will almost certainly result in reduced state spending but also some form of tax increases, as we’ve seen in Illinois. Given this mess that California has gotten itself into, its not a surprise that companies are fleeing California. Unfortunately, as companies leave the situation only gets worse, and its unlikely that any of these companies have said, “I’ll be back.”
The Tax Foundation lists California as having the 6th highest individual tax burden of all states, but the business tax climate ranks 49th out of the 50 states.