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November 11, 2021

PRESIDENT’S NOTES: About the “California Exodus”

Raise your hand if you know someone who has moved out of California in the last several years.

I see a lot of hands out there.

Over the last year or so, there has been an interesting bit of back-and-forth over whether California is in the middle of an “exodus,” more specifically a quickening flight of people who work in our businesses and pay taxes.

The debate starts with a sharp disagreement on that question, which sort of precludes the next and more critical series of questions as to the factors that motivate people to quit California.

There are some indisputable facts, however, that ought to cause the elected leadership of the Golden State to reflect with objectivity on the role of public policy choices made over many years and the choices that can be made now.

The 2020 census showed California with a 6.1 percent increase in population during the decade prior, which continues a longer-term trend of slowing population growth here. But a more focused look on migration between California and the other 49 states sheds light on the debate as to whether there is, in fact, an exodus from California underway.

The Public Policy Institute of California (PPIC), a non-partisan think tank, reported that during the last decade, California lost about four times as many people with less than a bachelor’s degree as it gained in people with at least a bachelor’s degree. Similarly, PPIC researchers noted that the state lost nearly five times as many low- and middle-income adults as it gained in higher income adults.

This suggests a concerning flight of the state’s available workforce for many critical jobs. But wait, there’s more!

The state’s non-partisan Legislative Analyst’s Office (LAO), an arm of the state Legislature, reviewed Internal Revenue Service data and found additionally concerning trends in the last decade. The first is that the state is experiencing a long-term, and recently elevated, flight of taxpayers to other states. From 2017 to 2019, the net outflow of tax filers from California ranged between 150,000 and 175,000 each year. In a seeming contrast to PPIC, the LAO researchers concluded that the flight of taxpayers from California is “most pronounced among older and more affluent residents.” They also found that the segment of taxpayers most likely to have kids at home (age 35-44) had the “highest net outflows” of taxpayers.

It should be readily apparent to all that in a state with a growing population (albeit less robustly) requiring more public services, leaders ought to be worried about—and act to reverse—an annual flight of those among us who pay the taxes necessary to fund increasing public service demands.

Yet that isn’t what we’re seeing and hearing. Sure, in Sacramento there has been renewed talk about doing something to reduce the high housing costs that motivate so many to leave but building houses in California is incredibly expensive and there is no real push to address the environmental and other regulatory cost drivers that discourage new home construction.

If anything, California’s political and social elites are insistent that the state is as attractive as ever to those seeking opportunity. It is simply unbelievable to them to hear, as they do from so many advocates of the state’s agriculture industry, that while farmland can’t be moved to another state or country, the capital that drives farm production and expansion can move away, and is moving away, due to a multitude of factors, including several that are purely a function of the state’s regulatory climate.

The question again: Is California experiencing an exodus? Maybe it’s a matter of semantics, but for most of us there is no question that the number of people in our professional and social circles who have left or are committed to leaving soon has increased in recent years. At what point do the consequences become so apparent and grave that there is no longer any point arguing over data sets and semantics, and instead get about the hard work of resetting the state’s regulatory philosophy?

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Now a word about someone who will not be among those to quit on California. In fact, even as California’s policies made farming so much more challenging, Carol Chandler chose to step forward as an advocate for sound agriculture policy and for recognition of this industry’s incredible contributions to her home state. Carol’s legacy of activism and engagement, not only in agriculture policy but also in higher education and more, serves as inspiration to countless others. Carol Chandler, recipient of the 2021 Western Growers Award of Honor, truly represents the best of California.