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Harris Sherline: Leaving California Behind

More and more companies are closing up shop to flee the once-Golden State's oppressive business climate

In a Feb. 24 Orange County blog, Jan Norman noted that “an Irvine business relocation specialist has come up with a list of 100 California companies that have expanded elsewhere or pulled up stakes entirely (and left California) in this decade.”

Harris Sherline
Harris Sherline

The list includes the following, among others:

Abraxis Health (Los Angeles), Apple Computer, Assurant Inc. (Orange County), Automobile Club of Southern California, Bazz Houston Co. (Garden Grove), Beckman Coulter (Brea), BPI Labs (Sacramento), CalPortland Cement (Riverside County), Check ‘n Go, Creators Syndicate (Los Angeles), DaVita Inc. (L.A.), Digital Domain (Venice), Ditech (Costa Mesa), DuPont Fabros Technology (Santa Clara), eBay (San Jose), Edwards Lifesciences (Irvine), Facebook (Palo Alto), FallLine Corp. (Huntington Beach), Fidelity National Financial (Santa Barbara), First American Corp. (Santa Ana), Fluor Corp. (Aliso Viejo), Hilton Hotels Corp. (Beverly Hills), Intel Corp. (Santa Clara), Intuit (Mountain View), JC Penney (Sacramento), Knight Protective Industries, Kulicke & Soffa Industries Inc. (Irvine), Lennox Hearth Products Inc. (Orange), MiaSolA (Silicon Valley), Patmont Motor Werks Inc., Pixel Magic (Toluca Lake), Premier Inc. (San Diego), Pro Cal of South Gate, Red Truck Fire & Safety Co. (Fresno), Simple Tech (Santa Ana), SolarWorld (Camarillo), Special Devices Inc. (Moorpark), StarKist, STaSIS Engineering (Sonoma County), Tapmatic (Orange County), Telmar Network Technology Inc. (Irvine), Terremark (Santa Clara), Terumo Cardiovascular Systems (Orange County), Toyota (Fremont), True Games Interactive (Irvine), Twentieth Century Props of Los Angeles, US Airways (Orange County), US Press (L.A.), USAA Insurance (Sacramento) and Yahoo.

Specific reasons given for relocating vary, but in general, they all demonstrate dissatisfaction with the business climate in California:

» Bazz Huston Co. “has slowly been building a work force of about 35 people in Tijuana. The company said it expects to move more jobs to Mexico, citing cost and regulatory difficulties in California.

» BPI Labs relocated to Evanston, Wyo., a move the company’s owner called “very successful,” and said, “It felt good and I’ve never looked back.”

» Worker compensation rates in Utah help make Check ‘n Go financially healthier.

» Creators Syndicate said Los Angeles operates like a “banana republic.”

» FallLine Corp. said it was being “hammered” with multiple government regulator fees in California.

» Fidelity National Bank referred to California’s “oppressive” business environment.

» Intuit of Mountain View created a customer support office with 110 people outside of California because of lower operating costs.

» Knight Protective Industries moved to Oregon, “where four-day workweeks were permitted by the state” and wanted by its employees.

» Lennox Hearth Products Inc. moved to Tennessee “to reduce costs and increase operating inefficiencies.”

» Patmont Motor Werks Inc. (GoPed manufacturer) left California after being hit by state regulators for hundreds of thousands of dollars in small fines, even though the company has a stellar record.

» Red Truck Fire & Safety Co. departed “because of California’s myriad fees and regulations” that amounted to “death by a thousand cuts.”

» SolarWorld moved to Oregon after the state offered property tax abatement and business energy tax credits.

» STaSIS Engineering moved to West Virginia, where there is “a friendlier business climate.”

» Tapmatic’s owners said they were “fed up with the onerous business environment.”

» Twentieth Century Props went out of business as film-making moved to lower-cost states.

» US Press shifted work to Portland, “where union rules were almost rational.”

“The list will grow as Sacramento considers more measures that will increase corporate taxes, increase workers’ comp costs, increase regulatory reporting requirements (along with higher fines for minor infractions), increase gasoline and diesel-fuel taxes, increase water rates, increase electric-power rates and increase assorted fees that will cause services to become more expensive.”

Keep in mind that the list from which the foregoing was taken named more than 100 companies that have taken flight from California. It reads like a Who’s Who of corporate America in California, and it appears that there is no end in sight to the exodus of firms from the “Golden State” to escape the oppressive regulatory and tax climate that harasses California businesses.

This trend is one of the major reasons for California’s high rate of unemployment, which rose to 12.6 percent last week, with the Riverside-San Bernardino-Ontario metro area at 15 percent.

Furthermore, don’t forget, these moves also mean the loss of many of the high-earning individuals who pay most of California’s income taxes.

— Harris R. Sherline is a retired CPA and former chairman and CEO of Santa Ynez Valley Hospital who has lived in Santa Barbara County for more than 30 years. He stays active writing opinion columns and his blog,

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