Randy Thompson: Why Californians Are Really Leaving the Golden State

Randy Thompson
Randy Thompson

I was born in Santa Monica, California, raised in the San Fernando Valley, went to Robert Fulton Jr. High, Van Nuys High School, Pierce Jr. College, Cal State Northridge (BS degree), and then USC (MBA).

In other words, dude, like I have California-creds, bro.

That said, I never learned to surf, I never drove a lowered ’62 Chevy, and I don’t rap. But I’ve always liked guns, pickup trucks, and country music. Sometimes I think maybe I was born in the wrong place. But I got here fast as I could. Lately, however, there seems to be a lot more transplants like me. And that’s got me a little worried.

While the Toyota move has gathered the most attention, the Summer 2015 Dallas-Fort Worth Real Estate Review documented many others who have chosen to pick up their businesses and leave the Golden State behind. Why? When I was out in Rialto, California, recently, wrapping up an industrial project there, I gained some insight into the reasons, and I thought my readers might like to know what I learned.

There were two, big-deal news stories making the rounds out there that I noted with interest. The first: Mobility Plan 2035 in Los Angeles. And the second: taxes. (I know, in California? Taxes? Really?) Let’s take a brief look at each.

First, Mobility Plan 2035 calls for the closure to automobiles of some of the most congested, widest, and longest stretches of roads in greater Los Angeles. Why? Because, studies have shown (and I kid you not, someone actually paid to develop this data) only 5 percent of those hit by a car going up to 20 mph die, while over 80 percent of those hit by a car going 40 mph die.

Get it? Slow moving car = less damage. (I know, go figure.)

But rather than lower the speed limit to 20 mph, the City of Los Angeles has decided to close the equivalent of Midway Road, Preston Road, Northwest Highway, MLK Boulevard, Coit and Jupiter Roads, among others, limiting their use to bicyclists, rollerbladers, pedestrians, speed-walkers, and public transportation (think buses but not Uber). As a result, the already crowded streets will get even more crowded and effectively lower the speed limit for autos.

Of course, the underlying idea here is to encourage more Angelinos to hang up their car keys and hop on a Huffy. That may sound grand to the wine-sippers out west, but here in Texas we live in Practical-ville. The idea of peddling to work from say, Richardson to Las Colinas, in a business suit, in August, is just plain dumb. But this initiative was approved by the Los Angeles City Council on a 12-2 vote. U-Haul is going to need to send some more moving vans out there when this thing goes into effect.

The second issue raging in California is taxes. California boasts the country’s highest state income tax rate (13.3 percent) and the highest state sales tax rate (7.5 percent). According to Forbes.com, California is the second worst state in which to own a car (average five-year cost for the car payment, fuel, maintenance, license, etc., is $52,377), and the state ranks No. 46 on the list of best places to run a business. (For those of you who may be math-challenged, that means there are 45 better states for business!)

But, dad-gum, they still can’t make ends meet in California. So now, they’re proposing an all new tax. Watch close.

At $.66 per gallon, gas taxes in California are the second highest in the nation. And the revenue generated from these taxes are used to repair and build roads, bridges, and freeways. However, perhaps you have heard about the Toyota Prius, the Nissan Leaf, the Tesla and others. Trust me on this, out in California, people love these things. Granted, even out in Granola-land, electric vehicles only account for a small percentage of the total cars on the road, but they are a fast-growing segment. Why? Like I said, California has the second-highest tax rate on gasoline in the United States! And electric vehicles don’t use gasoline. Get it?

So somebody out there realized that all these environmentally friendly electric vehicle owners are not paying their share to keep up the roads. And we can’t have that! So guess what’s working its way through Sacramento? If you guessed California has plans to use event data recorders (think black boxes) to track every mile driven by every motorists by 2025, thus enabling the state to charge drivers by the mile, congrats, you’re right! Hold on now, no one will sit idle and allow the government to track where they go, will they? Well, in Oregon, state officials have already signed a contract with San Jose-based Azuga, which makes tracking devices that plug into a car’s dashboard. When the public protested, Oregon backed down slightly, suggesting those who feel this is an invasion of privacy could keep handwritten notes, or ‘driver-diaries,’ or maybe a smartphone app to report their miles driven.

Oh sure, that’ll work, right?

But trust me on this, the politicians in Sacramento are keeping a close eye on what their northern neighbors are up to and won’t be far behind.

So there you go, Texas. When you see more and more California license plates running around town you’ll know why.

And for my fellow defectors who recently left the left coast behind, please-oh-please remember why you decided to move here. We like Texas the way it is and want to keep it this way: low taxes, business-friendly, good public schools, sweet tea, brisket, big hats and all.

Don’t mess with Texas. It’s about all we’ve got left.

Randy Thompson is senior managing director at Cushman & Wakefield Inc. Contact him at randy.thompson@cushwake.com.


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