Large and small companies continue to leave the West Coast for Texas, primarily because the business climate in the Lone Star State is more appealing, according to a report by The Center Square.
Referencing statistics tallied by the California Policy Center, the report states that 237 companies have left California since 2005, citing the state’s expanding regulatory and taxation environment. More than half of them have moved to Texas. And since California Gov. Gavin Newsom took office in 2019, most relocating companies have consistently made Texas their new home, with many coming to North Texas.
An analysis by the California Policy Center shows that cities in the metroplex, especially Frisco, are the preferred destinations for companies leaving the West Coast. According to a news release from the Frisco Economic Development Corporation, 16 companies moved their headquarters to the city in 2022, including Wiley X and Informativ. McAfee moved its regional headquarters to Frisco but kept its corporate office in San Jose, California.
“Frisco is grateful our residents voted to create the Frisco Economic Development Corporation more than 32 years ago,” Mayor Jeff Cheney said in the release. “Our residents envisioned FEDC would become a driver in bringing high-paying jobs to our community. In 2022, our FEDC more than delivered on its mission to grow economic development and job opportunities throughout Frisco. As a result, we all benefit from higher quality of life.”
Other corporations that moved to Frisco from California in 2022 were Boingo and Ruiz Foods. Of course, Frisco isn’t alone in enjoying such relocations to North Texas.
Kelley-Moore Paints moved its headquarters from California to Irving last year but has since furloughed 700 employees at its plant in Hurst. According to The Center Square, Quickfee Solutions moved its national headquarters to Plano. Inbenta, an AI company, moved to Allen. In the last few years, McKesson and Charles Schwab have left San Francisco for Dallas.
Responding to the loss of business headquarters, Newsom claimed in a budget proposal last year that California’s “tax rates … are lower than the state of Texas,” the California Policy Center reported. “Ninety-five percent of Texans pay higher taxes than Californians.”
Touting Texas as “the headquarters of headquarters,” state officials said in a report detailing the number of corporate relocations from California and elsewhere since 2015 that the state “offers an environment where corporate operations across all industries can thrive. The Lone Star State champions a world-class economic landscape, attracting businesses of all sizes — from Fortune 500 headquarters to small- and medium-sized businesses — thanks to a unique combination of competitive business advantages that no other state can claim.”
Following a “spike” in relocations in 2020 and 2021, total relocations in 2022 returned to above-normal levels and continued through last year. For example, in 2020, 28 companies left California for Texas. The following year, that number was 36. It dropped to 15 in 2022, and by mid-September 2023, eight companies had relocated to Texas from California.
According to the overall data, 145 companies have relocated from California to Texas since 2015, bringing with them more than 3,200 new jobs. Total relocations to Texas over the same period totaled 284, bringing more than 6,000 new jobs.
But corporations weren’t the only loss for California, The Center Square reported. The state experienced its first population decline in “recorded state history” under Newsom in 2020. At the same time, the most population gains in Texas have come under Gov. Greg Abbott.
The Dallas Express reported that despite high crime rates and the prevalence of homelessness and vagrancy in the city, a report by U-Haul ranked Dallas ninth among U.S. cities that drew the most newcomers last year.
YTexas, using its Relo tracker, reported that Texas broke records with the number of corporate relocations from 2020 to 2022, which included Frontier Communications (Connecticut), Cacique Foods (California), Inbenta (California), Hanyang (South Korea), Fisher Investments (Washington), MSS International (South Korea), Landsea Homes (California), Ruiz Foods (California), Thermomix (California) and Kelly-Moore Paints (California).