Dumbass politicians have done it again . . .

Looks like California's tax-and-spend politicians have been effectively digging the grave of their State's economy. Casey Research links to Joseph Vranich, who reports:

Today, California is experiencing the fastest rate of disinvestment events based on public domain information, closure notices to the state, and information from affected employees in the three years since a specialized tracking system was put into place.

. . .

Our losses are occurring at an accelerated rate. Also, no one knows the real level of activity because smaller companies are not required to file layoff notices with the state. A conservative estimate is that only 1 out of 5 company departures becomes public knowledge, which means California may suffer more than 1,000 disinvestment events this year. The capital directed to out-of-state or out-of-country, while difficult to calculate, is nonetheless in the billions of dollars.

The top five destinations are:

1. Texas;
2. Arizona;
3. Colorado;
4. Nevada and Utah tied; and
5. Virginia and North Carolina tied.

Based on the legislature’s recent rejection of business-friendly legislation and Sacramento’s implementation of additional regulations, signs are that California’s hostility towards business will only worsen.

California is such fertile ground that representatives for economic development agencies are visiting companies to dissect our high taxes, extreme regulatory environment and other expenses to show annual savings of between 20 and 40 percent after an out-of-state move.

Officials from 14 states are making such presentations, namely: Arizona, Colorado, Florida, Georgia, Indiana, Louisiana, Nevada, North Carolina, Pennsylvania, South Carolina, Texas, Utah and Virginia – and Ohio is soon to be packing their bags for visits here. These are only the ones I know about; there may be others. Even the states that aren’t visiting are emailing, calling and sending letters to solicit California companies to move outright or select an out-of-state location when expanding.

There's more at the link.

Casey Research adds:

The decision-makers at the companies were interviewed and asked what factors led to a determination to leave the state or redirect investment. Not surprising that, again, taxes and regulatory burdens rank as a significant deterrent. Other incentives to look outside the state include: expensive location; dreadful legal fairness to business; and an excessively adversarial business climate. Chief Executive magazine calls California the “Venezuela of North America.”

And as if it was needed, a new incentive for businesses to leave the state was enacted on April 12, 2011, in the form of a new law requiring utilities to acquire one-third of their power from renewable sources within nine years. California is already home to electricity rates twice the national average. Rates are estimated to increase from 19% to 74% when the new regulation is fully implemented. Further, the upcoming “California Global Warming Solutions Act” has the potential to place overwhelming hurdles that do not exist in other states and countries in front of local companies.

The good news is that California continues to set the standard on how not to run a state. It’s an example that other states are paying attention to and plying the dunderheaded decisions of California legislators to their advantage. Free-market competition between states for business investment, and hence jobs, is under way, and will absolutely intensify as budget deficits squeeze a growing number of U.S. states.

A similar scenario is likely in play for individual California taxpayers as well, although statistics on this are hard to come by. As employers flee the state, it seems logical that job seekers will follow. And as the tax burden for funding government grows faster than the tax-paying population, look for a greater number of taxpayers to become former California taxpayers. The time for dreamin’ is long past. It is the dawning of a new tax age for state governments.

Again, more at the link.

Looks like, in business terms, California's a good State to be . . . from.

Peter