California Not So Golden For Residents

In California’s last fiscal year (July 1, 2006 to June 30, 2007), 89,000 more people moved out of California than moved into the state. This is according to the annual report of the California Department of Finance. The state still grew in populations, based on births and immigrants from abroad.

Why are families emigrating from the Golden State? Could it be California’s high individual income tax, which it makes it much less of a Golden State for retirees than neighboring states such as Nevada? Could it be that California’s abysmal business climate (the state ranks 47th) is driving businesses from the state? Perhaps it’s a combination of both.

The Los Angeles Times quotes Howard Roth, Chief Economist of the Department of Finance, as stating, “[The exodus] won’t be the lasting problem we had in the 1990s. It will go away.” Is he correct?

I have my doubts. The state has a $14 billion budget deficit. Democrats in the legislature are talking about cutting various tax deductions, such as the mortgage interest deduction, and are looking at other schemes to close the gap such as increased user fees and tax increases.

If and when Sacramento gets serious about cutting the state’s bureaucracy I’ll agree with Mr. Roth that the exodus is temporary. If not, it may be something that’s much longer lasting.

News Story: Los Angeles Times

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