Thanks, California, We’ll Take Your Cast-offs

As California’s political class continues to demolish the Golden State’s business climate, private businesses are fleeing in record numbers. Virginia is one of the primary beneficiaries.

Blogging as the “Business Relocation Coach,” Irvine, California-based Joseph Vranich has built a comprehensive database of corporate investment decisions based on public domain information, closure notices to the state and other sources. Last week he wrote that California was experiencing “the fastest rate of disinvestment events” since he put his tracking system into place three year ago.

So far in 2011, through June 16, he had recorded 129 disinvestment events, compared to 51 during a comparable period last year. “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,”Vranich writes.

He continues: “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 20 and 40 percent after an out-of-state-move.”

The top destinations of California businesses: (1) Texas, (2) Arizona, (3) Colorado, (4) Nevada and Utah tied, and (5) Virginia and North Carolina tied.

I have written repeatedly over the years that Virginia should not build its economic development efforts on the platform of industrial recruitment alone — we need to develop our capacity to launch and grow home-grown enterprises. California’s fabled ability to nurture start-up companies will replace many of the businesses that are fleeing. The state can bleed for a long time without dying. But outside of privileged pockets like Silicon Valley and Hollywood, which have so much wealth and talent that they may be indestructible, state policies are laying waste to the economy. Virginia will happily welcome California’s refugees.

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