Some say that a sign at Idaho’s western border reads, “Welcome to Idaho! If liberalism worked, you’d still be in California.” The sign may not be real, but its message deserves serious consideration.
California’s leaders used to think the state’s beauty and appeal would prevent California from ever becoming the site of an exodus. This year, fires plagued residents largely due to forest mismanagement. Even before the pandemic, outmigration from California had been steadily increasing for the seventh year in a row. These outmigration numbers suggest voters did not realize the actual ramifications of electing politicians who would establish enormous taxes, strict regulation on businesses, and lenient policies on crime. The Golden State, with its topographical diversity and natural beauty, should be one of the most desirable states in the nation, but progressive policies promulgated by one-party rule have harmed businesses and taxpayers and deepened inequality. Liberal policies touting a more equitable future have had the opposite effect in California.
California’s regulatory environment has caused a reported 18,000 companies to flee between 2009 and 2019, mostly towards places like Texas and Florida, which are tax havens relative to the Golden State. Why pay an $800 annual LLC tax while other states charge just a few dollars? Why wait around for Prop 15 to potentially pass this November? Prop 15 will raise costs for small businesses in an $11.5 billion annual property tax hike. Studies show this will harm female and minority owned shops the most. Governor Newsom will raise the minimum wage 7.7% to $14/hour starting on January 1, 2021. These changes were passed in 2016, when no one could have predicted the current COVID pandemic-induced 15% unemployment rate. Businesses need to work in environments that promote growth, not hinder it.
Yet strict regulation is only the beginning of California’s growing issues. In San Francisco, property crime has become common thanks to Prop 47, which states that theft under $950 worth of goods is no longer a felony. Small business owners who are victims of such theft can’t afford to helplessly roll their eyes at each flagrant abuse of a lenient law like this one. California has unsurprisingly seen a statewide increase in property crime since 2014. San Francisco holds the esteemed title of highest property crime rate of any big city in America. City residents don’t even blink at broken car windows anymore.
When companies founded in this pioneering state can no longer hold annual conferences in San Francisco due to the “poor street conditions,” something needs to change. Oracle relocated its OpenWorld conference to Vegas after 2019, in a move which resulted in San Francisco losing $64 million in revenue. In 2016, Prop 57 aimed to free up space in overcrowded prisons by allowing non-violent criminals to apply for early release. But ‘non-violent’ is not as innocent as it sounds: human trafficking of a minor, rape under specific cirumstances, and assault with a deadly weapon are all considered non-violent under Prop 57. If the state’s streets weren’t so unsafe and overrun with petty crime that companies have to flee and take their money with them, maybe California wouldn’t have to hike taxes for residents to make up for the budget deficits.
For those struggling to pay the rising housing costs, California Assembly Bill 5 made it very difficult for independent contractors, whether they be journalists, musicians, or car share drivers, to make real income. Independent contractors have the freedom to work multiple gigs and not be bound to minimum hour requirements. AB 5 forced all these workers to be classified as employees. Thanks to Governor Newsom’s exemptions after backlash from firms like Uber and DoorDash, the law seems even more arbitrary. Right now, landscape architects must be employees, while architects can be considered independent contractors. Again, if California is going to be this expensive, workers must be helped, and not hindered.
Sadly, what was once a thriving state is seeing longtime residents move out. According to a UC Berkeley poll, half of voters in California have considered leaving. California has enormous potential for a revival, but that hope and optimism slips away with every new tax proposed in Sacramento (new exit tax, new wealth tax, etc.) Policy after policy has soured residents on the state. Taxpayers in California simply ignore their broken car windows and robbed storefronts while paying top dollar for a quality of life that is inferior to much of the country. If there is any hope for California, it will start with taking a serious look at the policy failures which have made life worse and trying out new solutions, not doubling down on the ideas that have left the state in crisis.
Image Source: Daryl Cagle