Please ensure Javascript is enabled for purposes of website accessibility

West Bank Town Becomes ‘Big Prison’ as Israel Fences It In

1 day ago

Trump Says He’s Willing to Let Migrant Farm Laborers Stay in US

1 day ago

US Electric Vehicle Tax Breaks Will Expire on Sept. 30

2 days ago

Eyeing Arctic Dominance, Trump Bill Earmarks $8.6 Billion for US Coast Guard Icebreakers

2 days ago

Trump’s Sweeping Tax-Cut and Spending Bill Wins Congressional Approval

2 days ago

Americans Celebrate Their Independence With Record-Breaking Travel Numbers

2 days ago

US Supreme Court to Decide Legality of Transgender School Sports Bans

2 days ago

Nvidia Set to Become the World’s Most Valuable Company in History

2 days ago

Poll: 41% in US ‘Extremely Proud’ to Be American, Near Historic Low

2 days ago
Is California Strangling Its Golden Goose?
By admin
Published 3 years ago on
November 6, 2022

Share

Citing a Bloomberg News article, Gov. Gavin Newsom crowed last month about the probability that California would soon pass Germany to become the world’s fourth largest economy.

“While critics often say California’s best days are behind us, reality proves otherwise — our economic growth and job gains continue to fuel the nation’s economy,” Newsom said.

Throughout his governorship, Newsom has been obsessed with bragging that California is a global leader in just about every human activity — and subtly suggesting that he’s the reason for its success.

Dan Walters with a serious expression

Dan Walters

CalMatters

Opinion

It’s not surprising, therefore, that he didn’t mention another recent Bloomberg article, reporting that California is faltering in a major economic indicator it had long dominated — initial public offerings (IPOs) of stock by expanding corporations.

“Only nine companies headquartered in California went public during the first three quarters of 2022, compared with 81 that launched IPOs during the same period last year,” Bloomberg said in an analysis of filings. “Even more dramatically, California’s share of US IPO proceeds fell to 2% through Sept. 30, compared with 39% for 2021.”

Jay Ritter, a University of Florida finance professor, told Bloomberg that California’s meager IPO activity “is almost entirely” due to declines in valuation among Silicon Valley tech startups.

This is no small thing. The formation of new companies, followed by IPOs, has been a feature of the Silicon Valley-based technology sector for decades, creating untold billions of dollars in new wealth that filters through other sectors and generates immense amounts of income tax revenue for the state.

“We are already seeing an immediate effect,” Brian Uhler of the Legislative Analyst’s Office, told Bloomberg. “And it does appear to be significant.”

In September, California employers’ income tax withholding payments were down 5%, or $354 million, from a year ago with diminished IPO activity a driver of the decline, Uhler said.

During the first three months of the state budget’s fiscal year that began July 1, state revenues were nearly $5 billion below expectations, virtually all of it in income taxes.

The precipitous decline in IPO activity once again raises the question: Are California’s high taxes, high living and business costs and ever-tightening regulation strangling its golden goose?

A new report from Stanford University’s Hoover Institution provides evidence that the goose may be flying away.

The report by Joseph Vranich, whose company advises firms on relocation, and Lee E. Ohanian, a Hoover Institution senior fellow, says “the number of companies relocating their headquarters out of California in 2021 occurred at twice the rate of 2020. Our findings show that 352 companies moved their headquarters to other states just in the period from January 1, 2018, through December 31, 2021 … ”

Some of those relocations have been spectacular, such as McKesson, the nation’s ninth largest corporation, and Tesla, the leading maker of electric cars, from California to Texas.

The report covers only shifts of corporate headquarters, but there are other corporate moves, such as the Walt Disney’s relocation of 2,000 jobs from Los Angeles to Orlando, that are also negative indications. And corporate decisions not to locate in California or expand operations in the state are never publicly reported.
California may replace Germany on the global list of economies but that statistical exercise is far less important than the possibility that California’s economy has peaked.

Newsom is too smart not to know what the Bloomberg IPO article and the Hoover report imply. It may explain why he opposes Proposition 30, which would hike California’s marginal income tax rate to more than 15% and give investors another reason to shun the state.

About the Author

Dan Walters has been a journalist for nearly 60 years, spending all but a few of those years working for California newspapers. He began his professional career in 1960, at age 16, at the Humboldt Times. For more columns by Walters, go to calmatters.org/commentary.

Make Your Voice Heard

GV Wire encourages vigorous debate from people and organizations on local, state, and national issues. Submit your op-ed to rreed@gvwire.com for consideration. 

 

RELATED TOPICS:

DON'T MISS

What Are Fresno Real Estate Experts Predicting for 2025 and Beyond?

DON'T MISS

First California EV Mandates Hit Automakers This Year. Most Are Not Even Close

DON'T MISS

How Trump’s ‘Big, Beautiful Bill’ Will Make China Great Again

DON'T MISS

What’s Caitlin Clark Worth to the WNBA? A Lot More Than Her $78,066 Salary.

DON'T MISS

Trump to Sign Tax-Cut and Spending Bill in July 4 Ceremony

DON'T MISS

Madre Fire Spurs Evacuations Across 3 Counties, Grows to More Than 70,000 Acres

DON'T MISS

Clovis, Sanger, Madera, and Bass Lake Will Light the Sky With Fireworks Shows Tonight

DON'T MISS

Oil Dips Ahead of Expected OPEC+ Output Increase

DON'T MISS

613 Killed at Gaza Aid Distribution Sites, Near Humanitarian Covoys, Says UN

DON'T MISS

Fresno County Authorities Investigating Suspicious Death of Transient Man

DON'T MISS

West Bank Town Becomes ‘Big Prison’ as Israel Fences It In

DON'T MISS

Israeli Military Kills 20 in Gaza as Trump Awaits Hamas Reply to Truce Proposal

UP NEXT

July 4th Quiz: Test Your Knowledge of the Founding Fathers

UP NEXT

Presidential Election Reveals Big Shift in California Voting Patterns. Will It Last?

UP NEXT

From Victims to Perpetrators: Israeli Soldiers’ Nazi Comparisons and the Unfolding War Crimes in Gaza

UP NEXT

Dear Mayor and City Council, Fresno’s Housing Bottlenecks Are a Modern Form of Redlining

UP NEXT

A Path Forward on Immigration Reform That Strengthens America

UP NEXT

Israel Faces Genocide Accusations Amid Gaza Food Aid Killings

UP NEXT

I Detest Netanyahu, but on Some Things He’s Actually Right

UP NEXT

Much of LA’s Community of Immigrants Is Hiding, Leaving a Hole in the Fabric of the City

UP NEXT

Things Netanyahu Might Say if Injected With Truth Serum

UP NEXT

California Politicians Ignore Ag’s Troubles, but Boost Movie Business

Madre Fire Spurs Evacuations Across 3 Counties, Grows to More Than 70,000 Acres

1 day ago

Clovis, Sanger, Madera, and Bass Lake Will Light the Sky With Fireworks Shows Tonight

1 day ago

Oil Dips Ahead of Expected OPEC+ Output Increase

1 day ago

613 Killed at Gaza Aid Distribution Sites, Near Humanitarian Covoys, Says UN

1 day ago

Fresno County Authorities Investigating Suspicious Death of Transient Man

1 day ago

West Bank Town Becomes ‘Big Prison’ as Israel Fences It In

1 day ago

Israeli Military Kills 20 in Gaza as Trump Awaits Hamas Reply to Truce Proposal

1 day ago

Valley Crime Stoppers’ Most Wanted Person of the Day: Rachelle Maria Blanco

1 day ago

Russia Pounds Kyiv With Largest Drone Attack, Hours After Trump-Putin Call

1 day ago

Boxer Chavez Jr Expected to Be Deported to Mexico to Serve Sentence, Mexican President Says

1 day ago

How Trump’s ‘Big, Beautiful Bill’ Will Make China Great Again

Can you hear it — that loud roar coming from the East? It’s the sound of 1.4 billion Chinese laughing at us. Thomas L. Friedman The New Yo...

11 hours ago

Solar Farm in Riesel, Texas
11 hours ago

How Trump’s ‘Big, Beautiful Bill’ Will Make China Great Again

Caitlin Clark Signs T-Shirt
11 hours ago

What’s Caitlin Clark Worth to the WNBA? A Lot More Than Her $78,066 Salary.

President Donald Trump speaks during a press conference in the Roosevelt Room at the White House in Washington, D.C., U.S., May 12, 2025. (Reuters File)
1 day ago

Trump to Sign Tax-Cut and Spending Bill in July 4 Ceremony

The Madre Fire burning near New Cuyama has scorched 70,801 acres as of Friday, July 4, 2025, afternoon, making it California’s largest wildfire of the year, with only 10% containment and multiple evacuation zones in place. (CalFire)
1 day ago

Madre Fire Spurs Evacuations Across 3 Counties, Grows to More Than 70,000 Acres

1 day ago

Clovis, Sanger, Madera, and Bass Lake Will Light the Sky With Fireworks Shows Tonight

A pumpjack operates at the Vermilion Energy site in Trigueres, France, June 14, 2024. (Reuters File)
1 day ago

Oil Dips Ahead of Expected OPEC+ Output Increase

Palestinians gather to collect what remains of relief supplies from the distribution center of the U.S.-backed Gaza Humanitarian Foundation, in Rafah, in the southern Gaza Strip, June 5, 2025. (Reuters File)
1 day ago

613 Killed at Gaza Aid Distribution Sites, Near Humanitarian Covoys, Says UN

Billy Wayne Sinisgalli, a 54-year-old transient known locally as Wayne, was found dead along a rural Fresno road Wednesday in what authorities are investigating as a suspicious death. (Fresno County SO)
1 day ago

Fresno County Authorities Investigating Suspicious Death of Transient Man

Help continue the work that gets you the news that matters most.

Search

Send this to a friend