SV Biz Journal's exceptional analysis on how to stop local businesses from bailing on Silicon Valley
In a smart report that leaves the Merc in the dust, SVBJ reporters Mark Calvey and Allison Levitsky dissect why companies are leaving the Bay Area, and what local governments can do to slow the exodus. An edited summary is below; the whole story’s available here.
What can state and local officials do to coax companies to stay?
1. Lower taxes on personal income and capital gains.
California's comparatively high taxes--not to mention new levels state lawmakers in Sacramento have been considering--are blamed for spurring more middle-class and wealthy residents to move out of the Golden State.
2. Don't raise corporate income taxes
"While Oracle and Hewlett Packard Enterprise...made headlines with their decisions to leave, the untold story is how many other businesses also moved departments and functions out of this state because of California's high cost of doing business, and AB-71 (proposed state law to increase tax rate on corporations from 10.84% to 11.6%) would only make worse."--California Taxpayers Association
3. Reduce regulations on business
Example: The California Consumer Privacy Act...is the strictest of its kind in the United States and applies to California companies that have either more than $25m in annual revenue; buy, sell, or share the personal information of 50,000 or more consumers...or derive at least half their revenue from selling consumer information. "You have the jewel that every state and every country in the world wants to have, and we're losing it," said John Chambers, the former Cisco chief. "The big companies can afford it--the small companies can't."
4. Build more homes for the middle class
"We must look at private, market-based solutions that do not touch public dollars or our municipal general funds to provide solutions. I am a strong proponent of innovative financing for affordable housing, and put directly, utilizing new financing structures to allow private developers to fully fund municipal affordable housing."--Ahmad Thomas, CEO Silicon Valley Leadership Group
5. Make it harder to get tax increases at the ballot box.
"Every time a tax bill is put on the ballot, it's often approved because so many don't pay income tax."--Wallace, BPM. {A 2006 Tax Foundation Report found that nearly 40% of Californians don't pay state income tax.}
Read the whole thing here.
This article is part of an exclusive Opp Now series on California’s outmigration crisis:
Political commentator Joel Fox says Gov. Gavin Newsom must address the “tidal wave” of Californians moving to Texas for tax, business, and legal benefits, by correcting flawed legislation.
The PRI’s Kerry Jackson explains how the Silicon Valley has become a challenging place to do business.
The HJTA’s yearly “Follow the Money” report catalogues state mismanagement of taxpayer money. 2021’s report details key examples of corrupt bureaucratic spending, all closely intertwined with SF Bay Area exoduses.
Scan the high points of CPC’s “Book of Exoduses” from CA, including that $1 trillion-valued Tesla’s headquarters transferred to Texas, along with data center firm Digital Realty Trust and myriad other organizations.
Brandon Ristoff from CPC purports that “The Exodus” began plaguing our state long before COVID-19 did—due to residents’ taxes and housing expenses.
Lee E. Ohanian traces recent mass business departures to California’s imprudent economic policies.
Adam Ozimek and Connor O’Brien’s Economic Innovation Group report discusses how local family outmigration has reached historic highs.
Front Page Magazine’s Larry Sand discusses the Golden State exoduses en masse.
Follow Opportunity Now on Twitter @svopportunity.
Photo taken by Mike Mozart.