In 2018-19, California lost not quite $10 billion in gross adjusted income to other states, a bit less than New York. The following year, New York still had the largest loss of adjusted gross income, nearly $20 billion, with California close behind. By 2020-21, California had taken the “lead,” tripling its losses in just two years, with almost $30 billion in AGI fleeing the state. New York lost roughly $25 billion.
This flight of the well-off actually goes back more than a decade. Our research, based on IRS data, found that “there has been a significant rise in net outmigration of higher-income Californians since 2012.”
The “why” is not concealed in an ancient, coded manuscript hidden in a cave. People are leaving California for reasons that are well-known. The state has the heaviest tax load in the country. Housing costs eat up incomes so voraciously that only a few dollars are left over for monthly bills, savings, and investments. Energy prices are crippling and are only going to get worse as the forced transition to a zero-carbon grid takes conventional power offline and replaces it (at a percentage) with expensive green sources. The cost of living is outrageous. Crime has damaged the state’s image as well as residents’ perceptions of safety. And despite all the talk from the governor on down in regard to the homelessness problem, Californians are beginning to feel like the tacit message from their “leaders” is “just live with it.”
In other words, the quality of life in such a lovely place is in decline. California refugees would rather live in Texas, Florida or Tennessee, where there are no state income taxes; Nevada and Idaho, where housing is far more affordable; Arizona for its less burdensome cost of living and better public education, or Utah, where both the cost of living and crime rates are lower than in the Golden State.
While people, businesses and dollars check out of Hotel California (they can actually leave despite what The Eagles told us nearly a half century ago), policymakers remain unwilling to acknowledge the facts before them. They either refuse to address the problems, make them worse, or create new ones. And when they’re not legislating madness, they’re bragging about a California that no longer exists, as Newsom has done, because they wrecked it with the cudgel of progressive politics.
Kerry Jackson is a fellow with the Center for California Reform at the Pacific Research Institute.