Leaving California

Meathead Economics, from the Wall Street Journal.

It takes hard work to drive anyone away from California’s sunshine and scenic vistas, but politicians in Sacramento have been up to the task.

The latest Census Bureau data indicate that, in 2005, 239,416 more native-born Americans left the state than moved in. California is also on pace to lose domestic population (not counting immigrants) this year. The outmigration is such that the cost to rent a U-Haul trailer to move from Los Angeles to Boise, Idaho, is $2,090–or some eight times more than the cost of moving in the opposite direction.

This isn’t [Rob Renier’s] first foray into confiscatory tax politics. Last year he sponsored a ballot initiative narrowly approved by voters that imposed a percentage-point income-tax surcharge (to the current 10.3%) to pay for government mental-health subsidies. And in the late 1990s he helped to pass an initiative to raise the state’s tobacco tax by 50 cents a pack to pay for children’s health care.

All of this has contributed to the trend of wealthy taxpayers disappearing from the state. State finance office data indicate that the number of Californians reporting million-dollar incomes fell to 25,000 in 2003 from 44,000 in 2000. That decline has cost the state $9 billion a year in uncollected tax revenues.

California’s generous social programs depend on a strong population, a rich population, and a strong property tax base. A relatively small downturn in population and housing demand could cause a large correction in real estate prices.

When things were good, California was tempted into creating big social programs. Now that the economy is cooling down, they could wind up in the same boat as GM and Delphi – past their earnings peak and paying obilgations made during the good years.

LATER: Tam warns other states to be on the lookout for the type of California refuge who flees the state and then tries to Californize their new home: “Some folks may be leaving California looking for freedom, but [some] guys are just leaving to find more comfortable chains that don’t make them look fat.”

8 Responses to Leaving California

  1. SayUncle says:

    The company I until recently worked for closed down their California presence completely and moved it 50 miles inside Nevada to avoid the ridiculous property/income/other taxes.

    Nevada’s State Motto: We’re happy with Cali’s sloppy seconds.

  2. CS says:

    There are several articles in the press which state that california suffered a negative net migration for the year 2005. By all accounts, the loss is over 29,000 people. The people who moved however, betray a different reason than the one Mr. Jones attributes to this exodus. The Los Angeles Times did a random sample of the movers leaving california. 94% stated the cost of housing was the main reason influencing their decision to move. I am definitely no sympathizer to big government and its irresponsible spending, but research shows that the main reason for people leaving is not taxes; it is the cost of housing.

  3. Les Jones says:

    OK, but why is it that housing is more expensive there – govt. regulation perhaps?

  4. Jason Montoya says:

    I’m a Californian (actually originally Coloradan) who is seriously considering leaving due to high housing (buying AND renting) costs. I don’t think Sacramento has anything to do with the cost of housing, rather it’s a widespread “get rich” mentality. After the dot-com bust, people still wanted to make a fortune, and housing became the Next Big Thing. Sell your house in L.A. or Orange County, buy a cheap house 50 miles away (where I’ve lived for 15 years), wait for it to triple in value, sell it, retire. Only problem is, EVERYONE cannot be rich but just about everyone tried. Result: home prices shot sky-high, but there was no real reason to back it up like a discovery of oil in the region. Employers are not increasing their wages accordingly, so people are leaving. I think the next step is another recession, which will only drive more people out.

  5. Kat says:

    I am one of those native Californians fleeing this state. My reasons are two fold but are interrelated. California has become so overcrowded that driving anywhere whether it is 60 miles away or 6 miles away, has become a nightmare. The freeways here have no right to bear that name. Because of overcrowding and housing demand, housing costs have skyrocketed. The only people who can afford to live here are the illegal immigrants who are living 30 people to a single family home…which brings me to my second point. A big part of California’s overcrowding problem is due to illegal immigration and this state’s kowtowing to those same illegals. Southern California has become Mexico and unfortunately for us, it hasn’t become the nice parts of Mexico. Gang violence, graffiti, and litter is so commonplace in Southern California that people barely notice it anymore. It’s sad and it is disgusting. Our elected representation choses to turn a blind eye and so those of us who are keeping the government in the money are leaving. Let them collect their taxes from the illegal aliens. I predict California will be bankrupt within ten years.

  6. Jay says:

    I am also a Cali native in the process of leaving the state. Not only is the housing an issue, but the illegal immigrants run rampant in my neighborhood in Orange. My wife and I thought that paying a little more for a home in the Orange area would allow us to raise our 6 month old with pride and safety for many years. Not only did illegal Immigrants move in directly across the street within 2 months of our move in date, but coincidently, crime skyrocketed in the area. Other neighbors that have been in the area for years have NEVER experienced crime such as this. Peoples bikes, tools, etc started to become missing. I hated to blame the 4 ILLEGAL families living in the home, but when stolen tools were found in their backyard that belonged to other neighbors, I knew it was just the beginning. I noticed an increase in graffitti and loud music on our street. The city of Orange (department of housing)and ICE will not do their job in policing these families. Parking on my street is almost impossible to find due to an average of 10-12 utterly miserable looking cars parked nightly around their house. California has become a place for the very Rich and/or the very Poor. If your rich, you don’t care about the outside world or bills. If your poor, the State will take care of your health needs and usually you won’t care about your quality of life. The Middle class gets stuck paying taxes, healthcare, and everything possible that the State can squeeze out of us. This is why they’re leaving fast. If you’re smart and want a nice life for you and your family, you will leave this armpit ASAP. I really hate to say this, but I hope this state does go under the Pacific…SOON!!! I agree with Kat..By the way, speaking English in the U.S. should NOT be an option, it should ALWAYS be a necessity in our schools AND Society. God Bless and Good luck to all you Californians staying behind. You’ll definitely need it..
    Jay Benitez

  7. Ex Cali girl says:

    I have lived in California my whole life.I used to love it here.Now my husband and I hate it.Everyone in the neighborhood is illegal.We have one neighbor that is not and he is moving now too.Our next door neighbor has 24 people living in there house.They have so many cars that we are sometimes forced to park ours down the street and walk to our house.They leave beer cans all over there yard and trash piled up on the side of there house.Most of the cars they own are not running.They push them to different spots on the road so they don’t get tickets or towed.The cost of living has gone up so much and the wages at our jobs have stayed the same.I really want to have kids.I don’t see us living happily and raising a family here.I must say that this place has gone to sh*t.The only thing left that California has going for it is the natural scenery and the weather.Other than that it sucks.What will be left is rich people who can care less about anyone but themselves and the poor who will continue to soak up whatever benefits and money they can off the government.Then the really really poor who will just crowd the streets drunk begging for money.It is the middle class people that are getting screwed.I work everyday and I pay for my own benefits.I dont ask for assistance and I take care of all my bills.But I am literally being pushed of of my home town.We are moving to Washington State in just a week.I am super excited and I don’t care if it rains there everyday.Anything is better than this.I just want to have nicer neighbors,cleaner air,cheaper cost of living,and finally get our own place instead of getting rent raped.We cant even afford to save let alone buy our own house here.Wish us luck….Goodbye Cali hello Washington!!!Just for the record I am not a racist…I like all people in general.But it really has become a problem and I feel sorry for all the people left to deal with it.

    Much love

  8. BG says:

    I was born in 71 and raised in So. Cal (Ventura). We left for Texas in May 07 and bought a great home and our kids go to great schools. I don’t miss CA a bit and will only return to visit my family on the holidays.