Reply Mon 1 Oct, 2012 07:19 am


Due to high taxes, burdensome regulations, lack of public sector reforms, and a lackluster job climate, more people have left California than come to the state since 2005, according to a comprehensive study by the Manhattan Institute released on Tuesday, suggesting California is no longer “perceived by most Americans as the land where dreams come true.”
In the report, titled “The Great California Exodus: A Closer Look," Tom Gray and Robert Scardamalia found Californians have fled to states like Texas, Arizona, Nevada, Colorado, Idaho, South Carolina, and Georgia because those states have a better economic climate with less taxes and regulation.
The report found that between 1960 and 1990, 4.2 million Americans moved to California and helped accelerate California’s booming economy. Since 1990, though, California has lost nearly all of that gain, with net domestic out-migration averaging 225,00 residents a year. Between 2000 and 2010, out-migration has resulted in lost income of 5.67 billion to Nevada, $4.96 billion to Arizona, $4.07 to Texas, and $3.85 billion to Oregon.
The study found that “if all these trends continue, California may find itself in a situation similar to that of New York and the states of the midwestern Rust Belt in the last century, which have seen populations stagnate for decades, or even fall.”
Mitt Romney, on the campaign trail, has often warned that under four more years of President Barack Obama, the nation could become more like California. Decades ago, this would have been taken as a compliment. But, as the report details, it is anything but so today.
Californians are leaving for states like Texas because those states have more jobs and economic opportunity. The report notes that “more often than not, people move because there is a better opportunity elsewhere” and “families looking for economic opportunity travel to Texas now,” where the economy, unlike California’s, has been “booming.”
Those families had once traveled to California. But that is no longer so because companies “set up shop where conditions are more conducive to making a profit.” This also impacts retirees, who may move to “migrate to be near children who have taken jobs in another state.”
Consider Oklahoma. As the study notes, net migration from California to Oklahoma totaled only 775 residents from 1991 to 2000. Ten years later, Oklahoma’s job market was stronger than California’s, and 2,125 Californians moved to Oklahoma from 2001-2010.
Further, the study found most of the states Californians are fleeing to are right-to-work states. Of the ten top states Californians have fled to, "seven (Texas, Arizona, Utah, Idaho, Nevada, Georgia, and North Carolina) have right-to-work laws that explicitly ban the compulsory union shop."
The study found most of the “destination states favored by Californians have lower taxes,” and, as a general rule, “Californians have tended to flee high taxes for low ones.”
The study also examines several trends that may have instigated or accelerated the out-migration from California to more economically friendly states since 1990.
In 1990, California’s recession was worse than the rest of the nation’s, and the state’s unemployment rate surpassed the national average.
At the same time, not only were taxes on the rise in California, but residents and business owners felt that “the tax revolt that had started with Proposition 13 in 1978 seemed to be out of gas” because even Republicans, like Gov. Pete Wilson, were supporting and signing off on tax increases.
“It was a sign that California’s political leaders had abandoned any notion of trying to spur growth through tax cuts,” the authors write.
The study found that “California’s volatile tax structure (it depends heavily on corporate profits and income from capital gains) and its inability to restrain spending in high-revenue years made the state government increasingly vulnerable to a recessionary shock,” and that shock arrived in the early 2000s.
Public Sector Instability
The authors note that long before California’s municipalities began declaring bankruptcy in 2012, California’s Standard & Poor’s bond rating, by 2003, was already at “BBB,” the worst in the nation. The state then was “patching together budgets through short-term borrowing and accounting tricks,” and, as a result, “when recovery arrived in the middle of the decade, it did not resolve the structural imbalances between revenues and spending,” which is the cause of California’s troubles today. As of 2012, California has the lowest S&P rating in the nation.
According to the report, the “fiscal distress in government sends at least two discouraging messages to businesses and individuals.” First, they “cannot count on state and local governments to provide essential services—much less, tax breaks or other incentives.” Second, “chronically out-of-balance budgets can be seen as tax hikes waiting to happen, with businesses and their owners the likeliest targets to tap for new revenue.”
“In contrast, a fiscally competent state inspires confidence that it can sustain its services without unpleasant tax surprises.”
One interesting note the authors found: “Of the ten states that sent the most people to California in the past decade, eight are high-tax jurisdictions—and the only two that are not, Illinois and Michigan, had low credit ratings.”
According to the report, California’s regulations make it more difficult for employers to stay in or come to the state. It cites a 2005 study by the Milken Institute that found California was the fourth worst state in which to conduct business. This study even left out the impact of regulations, which the report noted was hard to measure precisely because it was difficult to quantify “the cost of delays, paperwork, and uncertainty due to unfriendly laws and bureaucrats” and that this was “not an exact science.” The report cited additional “business climate” surveys that “rank California near the bottom in the regulation category.”
Population and migration pattern studies are reflective because they are important indicators of a state's political and fiscal health.
“Migration choices reveal an important truth: some states understand how to get richer, while others seem to have lost the touch,” the authors write. “People will follow economic opportunity. The theme is clear in the data: states that provide the most opportunity draw the most people.”
The report notes that California’s leaders can start to “do something about the instability of public-sector finances,” “rethink regulations that hold back business expansion and cost employers time and money,” enact policies that enable more development of land instead of allowing environmentalists to have a veto over any land-use decisions, which would make land cheaper and more livable.
How California confronts this situation "will send a strong signal, whichever way they go: the state’s voters will be deciding to continue on the path of high taxes and high costs—or to make a break with the recent trend of decline."
“California’s economy remains diverse and dynamic; it has not yet gone the way of Detroit,” the authors note. “It still produces plenty of wealth that can be tapped by state and local governments. Tapping that private wealth more wisely and frugally can go far to keep more of it from leaving.”
This study used data from the Census, the Internal Revenue Service, the state’s Department of Finance, the Bureau of Labor Statistics, the Federal Housing Finance Agency, and other sources.
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Type: Discussion • Score: 1 • Views: 1,347 • Replies: 13

Reply Mon 1 Oct, 2012 07:23 am
Tom and Robert need some to vet their research and help them sort out whether they want to reference 1990 or 2005 as the year of change in in/out migration.
Reply Mon 1 Oct, 2012 09:18 am
calif "ex-patys" have been a topic of conversation since the 80's. I lived in STOCKTON in 1985 to 1988 and it really sucked then. Calif has become a crowded, overdeveloped desert area. Now, the land prices are so high that its unaffordable to most. I hadda have a "California exchange" which was a deferred COL that I paid to people in order that they may have lived in decent housing.
I remember a little hovel one of my geochemists bought near Mt St Diablo. It was no bigger than 1500 square feet and needed a huuuuge amt of work cause it was built so damn crappily in the 60's. This house went for over 600000$ in the 80's. In 1980, here in Pa, 600K woulda bought a fuckin 15K sq ft mansion on 20 acres.

Movin outta Calif is something that began in the Reagan year5s googa
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Joe Nation
Reply Mon 1 Oct, 2012 09:43 am
To which nirvana of a State are the fleeing?

Joe(I'm hoping it's Arizona so it gets overcrowded, dries up and blows away.)Nation
Reply Mon 1 Oct, 2012 09:52 am
@Joe Nation,
lots are moving to MONTANA (which really pisses of Montanans who dont even know what the hell a double soy latte is.

In about 3 years Montana is gona become a swing state. (hee Hee)

I have a dear (but politically uninformed) friend who owns a neat spread on the Madison River (along with several other hundreds of Californian ex pattys. The open range ultra conservative ranchers are talkin about range wars to deal with these "carpetbaggers".
Is America a great countrey or what?
Joe Nation
Reply Mon 1 Oct, 2012 12:52 pm
I was part (or, I guess, I wanted to be) of a movement to Montana from Hollywood in the early 70's. Paul Newman and Robert Redford vowed to get out of California and Hollywood and start the Big Sky Film Revolution.

I drove from Texas to Bozeman in 1971 in the middle of the biggest snowstorm I had ever seen.
(That kind of dimmed my ambitions.)
I wanted to be a screen writer and actor.
Everything was still in trailers and warehouses.
(that kind of snuffed them nearly out.)
I said I would be back in the fall and drove down to Tulsa ( in a goddamned snowstorm!) to work a summer job writing 'radio' scripts for teaching tapes. (History, Grammar, Reading Comprehension and Parts of Speech shoved right into the student's ears.)

I stayed there twenty-four years.

Had some children.

Joe(Married a bunch of women)Nation
Reply Mon 1 Oct, 2012 01:04 pm
@Joe Nation,
seems you predate googas great migration news by a few decades.

You stayed in Tulsa 24 years or Bozeman? Sometimes I miss the connecting phrases. SO, thats where ya got experience writing eh? I asked a friend of mine (guy wrote a new book called "The Finish") {I only said that to make a point not name drop} IASKED HIM howcum he writes so damn good and I write like ****.
HE SAIYD"WELL, I been writing for 40 years so you do learn some **** here and there on the way".
You, Edgar, an Endymion are the best damn writers we have here on A2K .

PS. I used to spend lotsa time in a town called ADA. They had EPA research centers there and a healthy respect for barbecued beef. (Everybody at the labs , even the secretaries ,had a "small spread" of 300 or more acres where they raised reaaalllyy good beefs)
Joe Nation
Reply Mon 1 Oct, 2012 01:52 pm
You honor me.

Thank you.

It was Tulsa for the 24 years. Interesting times, interesting people; there are still so many people in those parts I'd like to see and talk to again.

Ada was one of the towns I rode my bicycle through during the decade I was doing that sort of thing. We'd start in the morning by dipping our wheel in the Red River at Denison, Texas then we'd ride North to Ada some years, to Coalgate other years.
If the wind was from the South, as it generally was, you didn't hardly have to pedal.

Two things I learned about bar-b-cue places. The good ones don't have plates, they serve on a nice piece of butcher paper,and they don't have knives on any of the tables.
Joe("Hell, son, if you need a knife, then it's not bar-b-cue.")Nation
Reply Mon 1 Oct, 2012 05:12 pm
@Joe Nation,
ha, the lab guys had that down pat. (serving it up on shiny papers). "hes about half a good cook" was high praise.
I remember my first climbover the Watchita mountains from Dallas to Ada. I missed em entirely (nothin went off bubble as we rose).
Hell, we had taller chemical crackers in Delaware
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Reply Mon 1 Oct, 2012 07:44 pm
I have strong nostalgia for California, because I grew up there. But I doubt I could make it in that state these days.
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Reply Tue 2 Oct, 2012 04:21 pm
Same here Edgar.
I was born and raised in Southern Ca,but left in 1979 when I graduated high school and joined the service.
I have not been back since, except to visit my family.

Prices out there are stupidly high, especially real estate.
I have a 5 bedroom house on a 19,000 sq ft lot, and with taxes, escrow, insurance, and actual house payment, the total is $500 per month.
I can't get a room at a flop house in Ca for that price.
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Reply Tue 2 Oct, 2012 04:25 pm
Every time I read one of these threads, I always laugh, as I picture the beautiful walk home I'm about to have, in 70-degree weather while the rest of the country is roasting. We don't even have an air conditioner - no need for it.

High prices are a sign of value, low prices a sign of less value. Simple as that. It's expensive to live out here because it's perceived to be nicer than other places.

Reply Tue 2 Oct, 2012 05:22 pm
And I envy you.
Reply Tue 2 Oct, 2012 05:31 pm
I'm sure you wouldn't envy what we have to pay in rent every month.

But, you get used to that pretty quick. One of the best things about having limited space, is a lessened emphasis on physical goods. We simply don't have the room to buy all the stuff that we see and like, so it acts as a real deterrent towards buying... a bunch of **** we don't really need.

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