You Thought the CA Economy Could Not Get Any Worse – Really?
05/17/2012 21 Comments
Governor Brown will have his tax initiative on the ballots and the Milken Institute reports that operating a business in California is 23 percent higher than the national average.
This is not lost on CA business. In 2011, 254 California companies moved all or some of their work and the associated jobs out of state, according to Irvine business consultant Joe Vranich, who has been tracking these departures since 2009.
The pace is accelerating according to Vranich. An average of 4.9 businesses left California each week of 2011, compared to 3.9 per week (202 total) in 2010 and one a week (51 total) in 2009.
With the implementation of AB-32’s Cap and Trade program this fall, business and home owner can expect electrical rates to jump as utility companies are forced to load up on renewable energy, some that cost 50 percent more than plentiful natural gas. Details in the graphic below:
I have written about the PG&E program to institute the time of day rate increases that smart meters alls them to do HERE. Those costs are not figured in the Cap and Trade rate increases out lined above. Running a energy intense business during the day in the summer will be very costly.
Governor Brown cannot collect taxes on business that have left the state, though some legislators are trying to figure out ways do that. I predict that with the increase in energy costs and more business taxes, that the number of jobs leaving the state will continue to accelerate. The CA economy will feel the impact. Yes, the economy is going to get worse.