There’s no denying the California exodus

With human migration, there is something called the “gate test.” If a nation opens its gates, do people come in or do they flee? With the Berlin Wall, it was obvious. Once the wall fell, there was a rush of humanity from East to West, not the other way around. The “gate test” applies to states as well.

The California gates are open and people are going, well, elsewhere. That fact was made abundantly clear this past week when Census results were announced and California lost a congressional seat for the first time in the state’s history.

As Assemblyman Kevin Kiley put it on Twitter, “We just lost a seat in Congress. If the California Exodus is a myth, apparently the Census Bureau is in on it.” In the last decade, 1.3 million more people left California than came in from other states. And, it’s accelerating. Half a million people have left for other states in the last two years alone.

Boosters of the status quo were quick to point out that California’s population actually grew overall, it just didn’t grow as fast as other states. But that misses the point.

Net domestic migration is a measure of movement among states. Unlike population, it ignores international migration as well as number of births over deaths. Two decades ago, policy leaders and the media started paying attention to the fact that California was trending toward net domestic outmigration. Governors from other states, most notably Rick Perry from Texas, were openly poaching businesses from California arguing, correctly, that their states were better for businesses as well as the people they employ.

Only more recently have progressive politicians and their media allies started to push back against the narrative that California had lost its golden shine. They cherry-pick statistics showing that California’s economy is still vibrant and that the state remains the world’s center for venture capital and high tech. But high tech was here way before the decline began and even there, high tech firms are gravitating to other states.

California is no longer the state other Americans look to as the land of opportunity. It’s easy to see why. A recent article in Forbes by Americans for Tax Reform’s Patrick Gleason spells it out. “The average state and local tax burden for the seven states losing seats is 11.04%, which is more than 16% higher than the 9.48% average state and local tax burden for the six states picking up House seats,” Gleason writes. “In fact, the average top personal income tax rate for states losing seats in congress is 6.5%, which is 46% greater than the 4.45% average top income tax rate for states gaining seats.”

California already has the highest income tax rate in America, the highest state sales tax rate in America and the highest gas tax in America. And despite claims that Proposition 13 has resulted in low property taxes, that isn’t true overall. California ranks 17th out of 50 states in per capita property tax collections. And yet, there are bills circulating around the state Legislature again this year to raise the income tax rate even higher (Assembly Bill 1253), impose a wealth tax on the richest Californians (Assembly Constitutional Amendment 8 and AB 310) and lower the vote needed to pass costly local bonds and special taxes (ACA1).

When you consider that California’s budget reserves stand at $22 billion, with a rainy-day fund of $15.6 billion and an estimated $15.5 billion windfall from a pandemic-defying stock market — and the state still wants more of your money, it’s easy to see why Californians are fleeing to other states.

The good news here is that it is not too late. Rational  policies can return California to the days when businesses and citizens were coming through the gate to get here instead of leaving.

Jon Coupal is president of the Howard Jarvis Taxpayers Association.