{"id":276810,"date":"2026-04-20T13:37:10","date_gmt":"2026-04-20T13:37:10","guid":{"rendered":"https:\/\/www.newsbeep.com\/us-ca\/276810\/"},"modified":"2026-04-20T13:37:10","modified_gmt":"2026-04-20T13:37:10","slug":"are-businesses-really-fleeing-california","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/us-ca\/276810\/","title":{"rendered":"Are Businesses Really Fleeing California?"},"content":{"rendered":"

<\/a><\/p>\n

This story is part of our April 2026 issue. To read the print version, click here.<\/a><\/p>\n


\n
\n <\/p>\n

\n In the story of California as a state losing corporate
\n headquarters, Ronald Mittelstaedt fits the narrative almost too
\n well.\n<\/p>\n

\n In 2010, Waste Connections, where he\u2019s president and CEO, started
\n weighing the idea of uprooting its headquarters from Sacramento
\n to Texas. Many of the reasons had to do with wanting happier
\n workers. Homes, gasoline, electricity and more are cheaper in
\n Texas, making the overall cost of living about 15 percent less.
\n Unlike California, Texas has no capital gains or state income
\n tax, meaning the company\u2019s workers would have more take-home pay.\n<\/p>\n

\n When the company loaded up its trucks to move to The Woodlands,
\n outside Houston, in 2012, more than 90 percent of employees, most
\n of them native Northern Californians, went too. Since then, Waste
\n Connections has surged from $1.5 billion to $10 billion in
\n revenue and from about 6,000 to 26,000 employees. The company
\n couldn\u2019t have achieved the same success in California, says
\n Mittelstaedt. \u201cThe talent we needed wouldn\u2019t have come to
\n Sacramento,\u201d he says.\n<\/p>\n

\n But there\u2019s another side of California too: A place that
\n continues to draw and retain companies that need specialized
\n science and tech talent.\n<\/p>\n

\n Pam Marrone is the face of that. In 2006, she started Marrone Bio
\n Innovations, which made biological products for crop protection
\n and plant health, headquartered in Davis. In 2022, she sold the
\n business to Bioceres Crop Solutions. The new CEO wanted to move
\n it to Research Triangle Park in North Carolina to cut costs and
\n eventually relocated the administrative and finance functions
\n there. Marrone, who\u2019d stayed on the company\u2019s board, understood
\n the reasoning \u2014 Research Triangle has an \u201cincredible ag biotech
\n system,\u201d says Marrone.\n<\/p>\n

\n But it wasn\u2019t long till Bioceres brought everything back to
\n Davis. The cost savings weren\u2019t enough to justify relocating. And
\n employees preferred Davis. In the Raleigh-Durham area, \u201cyou have
\n to get everywhere by car. It\u2019s very spread out, very big. There\u2019s
\n no public transportation. So it\u2019s a different lifestyle,\u201d says
\n Marrone.\n<\/p>\n

Related:\u00a0Pam
\n Marrone, pioneer of biological agricultural products, expands her
\n reach through advising<\/a><\/p>\n

\n In 2023, she launched a new Davis-based company, Invasive Species
\n Corporation, which creates products to control non-native pests.
\n Davis fits the lifestyle of her talent pool: UC Davis graduates
\n who like the city\u2019s easy biking and transit. Farmers, her
\n customers, are close by, making it easy to do field trials.
\n Biological products are regulated by the state, but the
\n regulation is reasonable and predictable \u2014 her biggest problems
\n of late have been with tariffs and products sitting in customs,
\n she says.\n<\/p>\n

\n \u201cThis region is a gem that doesn\u2019t get the publicity that St.
\n Louis and Research Triangle Park get in terms of agtech
\n startups,\u201d she says. The state, she says, \u201cbends over backwards\u201d
\n to help businesses launching in that sector.\n<\/p>\n

\n \"\"<\/a><\/p>\n

\n Pam Marrone, co-founder of Invasive Species Corporation in Davis,
\n is a biotech entrepreneur specializing in organic pest control.
\n (Photo by Katy Karns)\n<\/p>\n<\/p>\n

\n The cases of big companies abandoning California have attracted
\n lots of media attention for a reason: Federal data show an
\n acceleration in the number of firms leaving. The state\u2019s tax and
\n regulatory climate ranks among the toughest in the country. But
\n that may not be the full picture. The state and Sacramento still
\n host plenty of startups and lure companies from abroad.\n<\/p>\n

Taxes, regulations and companies on the move<\/p>\n

\n Nationally, more firms are migrating at a faster pace than
\n before. About 6,500 moved in 2021, up from about 4,000 in 2002.\n<\/p>\n

\n But that trend has winners and losers, and California is the
\n second. A 2022 report by the Hoover Institution noted that the
\n state lost 352 company headquarters from January 2018 to December
\n 2021 and that the number of departures accelerated: More
\n companies relocated in 2021 than any other year in that period.
\n The authors blamed high taxes, punitive regulations, high labor
\n costs, high utility and energy costs and high costs of living,
\n especially housing. Indeed, on the Fraser Institute\u2019s latest
\n \u201ceconomic freedom\u201d index, which ranks states according to
\n government spending, tax and minimum wage levels, union density
\n and more \u2014 California was 47th.\n<\/p>\n

\n On another metric, manufacturing jobs, the state is sliding
\n backwards, too. Since September 2022, it\u2019s shed about 83,000
\n manufacturing jobs. One industry group, the California
\n Manufacturers & Technology Association, argues those losses stem
\n from state regulations and high equipment costs. Still,
\n economists don\u2019t agree on the causes of manufacturing job cuts,
\n which are happening nationally.\n<\/p>\n

Related:\u00a0Is
\n the Business Exodus to Texas Real?<\/a><\/p>\n

\n Some of those explanations fit the stories of two other
\n Sacramento businesses that left for Texas. Titans of CNC sells
\n machine tools and offers online education on machining and
\n manufacturing. In October 2020, the company, which won a 2017
\n Sacramento Region Innovation Award, said it was moving from
\n Rocklin to Flower Mound, 10 minutes from the Dallas-Fort Worth
\n airport.\n<\/p>\n

\n \"\"<\/a><\/p>\n

\n In October 2020, Titans of CNC moved from Rocklin to Flower
\n Mound, Texas, 10 minutes from the Dallas-Fort Worth airport.
\n (Shutterstock photo)\n<\/p>\n<\/p>\n

\n In a 2020 social media video that drew more than 100,000 views,
\n owner Titan Gilroy highlighted lower taxes and cost of living. He
\n told his employees that moving would give them a raise as their
\n taxes fell. \u201cGet out of these apartments \u2014 you\u2019re going to buy a
\n house,\u201d he told them. Employee gym memberships, a company perk,
\n dropped from $140 per individual in Rocklin to $64 per family in
\n Flower Mound, he added.\n<\/p>\n

\n For another owner, the reasons were more Sacramento-specific.
\n Mark Snyder co-owned the kitchen and gift store William Glen and
\n a sister store in downtown Sacramento. In 2021, the company
\n shuttered both and moved to a fulfillment center outside Fort
\n Worth.\n<\/p>\n

\n Snyder told news outlets they left because of the number of
\n unhoused people camping outside the stores and rising
\n shoplifting, which cost the company $15,000 a month. \u201cDo I stay
\n and fight? How long do I put off my dreams and what matters?\u201d
\n Snyder told a reporter. \u201cI\u2019d pay higher taxes if we got more for
\n our high taxes \u2014 like good schools and highways. But not in
\n Sacramento or California.\u201d\n<\/p>\n

\n Both owners declined requests for comment on how they view those
\n moves today.\u00a0 \u00a0\n<\/p>\n

\n Corporate headquarters relocations don\u2019t always mean abandoning
\n the state. Many companies shift the front office and keep
\n employees in California. But headquarters transfers matter
\n because they suppress in-state hiring, according to an August
\n 2024 analysis by the Bay Area Council Economic Institute, an
\n economic and policy think tank. It compared hiring by four
\n corporations \u2014 Tesla, Hewlett-Packard, Snowflake, and Charles
\n Schwab \u2014 whose headquarters left the state. In three of the four
\n cases, the share of their hiring in California dropped by double
\n digits. It rose for one of the four, but the increase was less
\n than 3 percent.\n<\/p>\n

Related:\u00a0Boom From the Bay:
\n The influx of high-skilled workers is boosting Sacramento\u2019s
\n economic prospects<\/a><\/p>\n

\n Exacerbating matters is the state\u2019s population loss. After the
\n 1848 discovery of gold on the South Fork of the American River
\n between Auburn and Placerville, 300,000 people poured into the
\n state within the next six years, bringing more demand and more
\n businesses. Today, the same is happening in reverse: From 2018 to
\n 2025, there was a net outflow to other states \u2014 movers-in versus
\n movers-out \u2014 of about 2 million people, most often driven by high
\n housing costs, according to an analysis by the Public Policy
\n Institute of California.\n<\/p>\n

\n Those housing costs may also impede hiring for in-state
\n companies. Before the pandemic, 33 percent of the job postings of
\n California-based Fortune 1000 companies were in-state, a number
\n that\u2019s dropped to 25 percent, according to the Bay Area Council
\n analysis.\n<\/p>\n

\n All of that may understate the magnitude of company flight.
\n Before 2019, net out-migration of California companies \u2014 incoming
\n firms minus outgoing firms \u2014 had never hit more than 200 in any
\n year except 1994. But in 2019 it topped 209 and then ballooned to
\n 741 in 2022, according to a Comstock\u2019s analysis of federal Bureau
\n of Labor Statistics data. Altogether, in the five years from 2019
\n to 2023, the state lost almost 2,100 companies on net. New York
\n State came second at about 1,800. No other state\u2019s number
\n surpassed 1,000.\n<\/p>\n

But companies leave for lots of reasons<\/p>\n

\n The state\u2019s business climate also isn\u2019t everything. Some
\n companies that closed operations in the Sacramento region say
\n their reasons had nothing to do with taxes or regulations.\n<\/p>\n

\n In 2021, the Educational Media Foundation, a faith-based
\n broadcaster, announced it was moving from Rocklin to Tennessee\u2019s
\n Nashville area. \u201cCalifornia was good to us,\u201d says CEO Tom Stultz
\n by email. But they needed to be closer to the artist and music
\n community in Nashville.\n<\/p>\n

\n \"\"<\/a><\/p>\n

\n Educational Media Foundation, a faith-based broadcaster, moved
\n from Rocklin to Tennessee\u2019s Nashville area. (Shutterstock photo)\n<\/p>\n<\/p>\n

\n In February, Anheuser-Busch shut down its Fairfield brewery,
\n which employed 240 people. A spokesperson said by email it closed
\n two other plants in New Jersey and New Hampshire to channel money
\n to a $2 billion modernization of its 100 other facilities.\n<\/p>\n

\n And a Sacramento fuel manufacturer that didn\u2019t wish to be named
\n opened a new production facility in Texas in 2024 and will launch
\n another by 2027. A representative says they put those in Texas
\n instead of California because of Texas\u2019 lower electricity prices
\n and cluster of energy industries. But the company retains its
\n Sacramento headquarters because it can tap corporate talent here
\n and has access to high-quality labs in West Sacramento.\n<\/p>\n

Business numbers are still growing<\/p>\n

\n As bleak as much of this appears, the bigger picture isn\u2019t so
\n grim. The biggest driver of the California corporate numbers
\n isn\u2019t companies leaving the state but the number of new corporate
\n headquarters launching and folding within the state. In 2021, for
\n example, about 200 moved out of state. But that year, about 800
\n opened in-state while 750 shut down, according to an analysis by
\n the Public Policy Institute of California.\n<\/p>\n

\n Overall, the number of California businesses keeps growing: About
\n 245,000 opened and about 183,000 closed from March 2023 to March
\n 2024, a net gain of about 62,000 companies and 87,000 jobs,
\n according to the latest federal data. That\u2019s part of a longer
\n trend. From 2015 to 2024, the number of state businesses grew
\n from about 1.5 million to 1.9 million.\n<\/p>\n

Related:\u00a0Trump\u2019s
\n Tariffs Hurt Some Local Businesses, but Prompt Others to Shift
\n Gears<\/a><\/p>\n

\n In Sacramento, firms are coming in from abroad. Last year, the
\n Greater Sacramento Economic Council reported attracting a dozen
\n foreign-owned companies to the region between 2021 and 2024,
\n creating almost 3,000 jobs.\n<\/p>\n

\n Bottom line? The effect on employment of company headquarters
\n leaving California \u201cis not negligible, but it also does not
\n reflect a major change in the state\u2019s employment picture,\u201d
\n concludes the Public Policy Institute.\n<\/p>\n

\n And for those who can afford it, the state\u2019s climate and land
\n will always be a draw. Even Mittelstaedt sounds wistful
\n discussing the tradeoffs of Waste Connections\u2019 move. There are
\n those Texas summers \u2014 \u201c105 during the day and 102 at night,\u201d he
\n says.\n<\/p>\n

\n And California has its ocean, mountains and valleys. \u201cThere\u2019s
\n just one Santa Barbara, one Carmel, one Napa, one San Diego, one
\n Pismo Beach. You don\u2019t have that anywhere else, right?\u201d he says.
\n He still has a home in Sacramento and misses family who live
\n here.\n<\/p>\n

\n \u201cI hate to say it, but all the things that the state government
\n doesn\u2019t have anything to do with are great in California,\u201d he
\n adds.\n<\/p>\n

\n \u2013\n<\/p>\n

\n Stay up to date on business in the Capital Region:
\n Subscribe to the Comstock\u2019s newsletter
\n today.<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"This story is part of our April 2026 issue. To read the print version, click here. …\n","protected":false},"author":2,"featured_media":276811,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[32],"tags":[121,123,122],"class_list":["post-276810","post","type-post","status-publish","format-standard","has-post-thumbnail","category-sacramento","tag-sacramento","tag-sacramento-headlines","tag-sacramento-news"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/posts\/276810","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/comments?post=276810"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/posts\/276810\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/media\/276811"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/media?parent=276810"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/categories?post=276810"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/tags?post=276810"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}