March 1, 2023

President’s Notes: Hey Sacramento, Still Not an Exodus?

About a year ago, demographers and others—notably U-Haul—reported data that strongly suggested a stream of people leaving California. It was no shock to those frustrated by the policies and practices emanating from Sacramento and many local governments. I wrote about it here, noting that the very earliest indications of a trend often present that last good opportunity for politicians to take notice and course correct; waiting for incontrovertible proof that the trend is real means fewer options.

Representatives of the state’s business community, vastly outnumbered Republican state legislators and even some of their Democrat colleagues tried to get the attention of those in power, but by and large were ignored. A veteran Los Angeles Times columnist at the time asserted, “There is no exodus.” Nothing to see here!

Collectively they sounded like Sergeant Schultz from the old television series “Hogan’s Heroes” who insisted to his superiors, “I know nothing! Nothing!” despite having intimate knowledge of the security violations of Colonel Hogan and his crafty band of Allied prisoners of war.

It’s getting harder for the Sgt. Schultz characters in Sacramento to plead ignorance. New data released in February confirms that a heck of lot of Californians loaded up the U-Haul and headed out.

The U.S. Census Bureau reported in February that between 2020 and 2022, the number of Californians fleeing the state outnumbered those coming in by nearly 900,000.

Even in a state of 39 million souls, that is an exodus.

The effects are sure to be even worse than the numbers suggest. We can assume the refugees share at least this in common: They are taxpayers. The weight of California’s painfully high taxes, sky-high housing prices and energy costs powerfully motivates working families to depart. In contrast, the state’s very wealthy are better able to accommodate those costs, though certainly some have bailed out.

California is home to about 30 percent of the nation’s homeless, a cohort that compels major public expenditures. Beyond the homeless population, California has a large and growing population dependent on public health and other services. Combine a stampede of taxpayers heading to other states and a large population tapping public programs and eventually, as Margaret Thatcher warned, “Socialist governments traditionally do make a financial mess. They always run out of other people’s money.”

A glimmer of hope arrived recently in the form of an executive order issued by Governor Gavin Newsom, directing state water authorities to retain water in our reservoirs that would otherwise be released to rivers and out to sea to satisfy environmental rules. Activist environmental groups went ballistic, as they always do when they don’t get everything they demand.

Why did Newsom do this? The motivations of politicians are easy to speculate about, and equally easy to get wrong. But perhaps Newsom realizes that the rigid and punishing rules imposed on our water system are increasing economic and social despair in the Central Valley while failing to deliver the ecosystem benefits touted by environmental activists to justify them. And, hopefully, Gavin Newsom has drawn a connection between these punitive and failed water policies and the U-Haul caravans retracing – in reverse – the paths of previous generations who sought greater freedom and economic opportunity in the Golden State.


On February 9, we learned of the passing of Allan Zaremberg. After serving as chief legislative aide to Governors Deukmejian and Wilson, Allan led the California Chamber of Commerce as CEO from 1998 to his retirement in 2021. I was fortunate to work with Allan throughout my tenure with Western Growers and before as a consultant and political appointee in the 1990s. Allan was rightly remembered by many for his dedication to and belief in the powers of the private sector to serve
the needs of society.

Less prevalent in the remembrances, however, is something more poignant to me. Zaremberg’s passing recalls a better era in Sacramento, one defined by compromise and practicality in policy making, undergirded by shared confidence in private enterprise as the strongest agent for positive economic and social outcomes. Suffice to say, such is not the case today.

Perhaps the pendulum will swing back, but those dedicated to advocating for the business community know we must be far more aggressive as long as the interest groups that dominate Sacramento, and the lawmakers aligned with them, continue on their current path.

Allan Zaremberg was an honorable and dedicated advocate for California’s business community. May his example live on.