California Now Bans State Employee Travel To 17 Red States, But Thousands Of California Families Are Moving To Them Every Year

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Posted by Dennis Hull on Thursday, July 1st, 2021, 4:33 PM PERMALINK

California’s ban on government employee business travel to certain Republican-led states expanded even further this week. With Attorney General Rob Bonta’s addition of Florida, Arkansas, West Virginia, North Dakota, and Montana to the California travel blacklist, the Golden State now forbids state employees from visiting a total of 17 states on official business, barring special circumstances.

Bonta’s decision to expand the list comes on the heels of laws passed in those five states related to the participation of transgender students in school sports. Bonta’s predecessor, now Health and Human Services Secretary Xavier Becerra, dramatically grew the list during his four years in office in response to similar legislation.

Despite Attorney General Bonta’s assertions of “an unprecedented wave of bigotry and discrimination” in the 17 listed states, Californians themselves seem to have a different perspective. IRS migration data reveals that Californians are flocking in droves to the 17 states where California state travel is restricted. Between 2018 and 2019, the state of California had a net loss of a whopping 75,117 people to the 17 states on California’s blacklist. Those residents took $4,722,021,000 in annual income with them.

That continues a years-long trend of outmigration from California to red states with lower tax burdens, a reduced cost of living, and a better tax and regulatory climate. In fact, several of the states on the blacklist recently reformed their tax codes. Florida, one of nine states with no income tax, reduced its commercial rent tax from 5.5% to 2% in April, creating an even more competitive business environment for the state, particularly in comparison to high-tax, high-regulation states like California. Between 2018 and 2019, the Sunshine State saw a net of 4,811 Californians migrate to its shores, hauling over a billion in annual income.

In North Carolina, where the California embargo on state business travel is stretching into its fifth year, 4,648 ex-Californians on net and $268 million in annual income flowed from the west coast to the Tar Heel State between 2018 and 2019. And those numbers seem likely to rise even further over the next few years if the new budget recently approved by the North Carolina Senate becomes law.

The North Carolina Senate budget, passed on June 24, would reduce the state’s flat personal income tax from 5.25% to 3.99%. For California residents in the top marginal income tax bracket, moving to North Carolina would lower their state income tax rate by a striking ten percentage points. North Carolina’s increasingly business-friendly environment may well attract thousands more Californians in the coming years who are weary of their state’s overbearing tax system and stifling regulations.

Meanwhile, Republican legislators in Montana and Idaho, two of the states that Attorney General Bonta added to the blacklist this week, reduced the top marginal tax rate in each state from 6.9% to 6.5%. A net of nearly 14,000 Californians made Idaho their home between 2018 and 2019 – a remarkable figure for the 13th least populous state in the country.

Former Attorney General Becerra added Tennessee to the government travel ban in 2016, when it passed a law permitting mental health counselors to reject patients based on religious beliefs. But a net 5,829 Californians still took their $376 million in annual income to start a life in the Volunteer State between 2018 and 2019. Tennessee has developed an attractive tax climate, becoming a true no-income tax state last December after its investment income tax was fully phased out.

Texas is also among the blacklisted states that recently enacted pro-growth tax reform. Republican Governor Greg Abbott signed a law in 2019 to limit the growth of property tax burdens, requiring localities to obtain voter approval before raising property taxes more than 3.5%. Tellingly, the state welcomed a net 33,274 ex-Californians and their $1.58 billion in annual income between 2018 and 2019.

These migration outflows from California are part of a broader, decade-long trend of Californians leaving for states with friendlier tax and regulatory climates. The Democratic supermajorities in Sacramento show no signs of abating the deluge of progressive policies that continue to drive employers and families out of the state. It’s why California is set to lose a congressional seat for the first time in history next year. Though Attorney General Bonta can try to weaponize his vast political power against Republican-led states through a ban on government travel, the real cost will be paid by a declining California, as families take their wealth and their livelihoods to freer states.

Below is a complete list of net migration outflows from California to the 17 states to which state business travel is currently prohibited, calculated using 2018-2019 IRS migration data.

 

Florida

Net population outflow: 4,811

Net annual income outflow: $1,195,069,000

 

West Virginia

Net population outflow: 125

Net annual income outflow: $17,944,000

 

North Dakota

Net population outflow: 282

Net annual income outflow: $3,409,000

 

Arkansas

Net population outflow: 1,668

Net annual income outflow: $46,470,000

 

Montana

Net population outflow: 2,175

Net annual income outflow: $135,726,000

 

Texas

Net population outflow: 33,274

Net annual income outflow: $1,581,624,000

 

Alabama

Net population outflow: 1,101

Net annual income outflow: $62,818,000

 

Idaho

Net population outflow: 13,942

Net annual income outflow: $734,470,000

 

Iowa

Net population outflow: 327

Net annual income outflow: $15,040,000

 

Oklahoma

Net population outflow: 2,187

Net annual income outflow: $27,860,000

 

South Carolina

Net population outflow: 2,192

Net annual income outflow: $133,094,000

 

South Dakota

Net population outflow: 691

Net annual income outflow: $51,494,000

 

Kentucky

Net population outflow: 973

Net annual income outflow: $31,416,000

 

North Carolina

Net population outflow: 4,648

Net annual income outflow: $268,428,000

 

Kansas

Net population outflow: 608

Net annual income outflow: $20,546,000

 

Mississippi

Net population outflow: 284

Net annual income outflow: $20,377,000

 

Tennessee

Net population outflow: 5,829

Net annual income outflow: $376,236,000

 

Photo Credit: Devin Cook

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