Exiting California Before It Bleeds Out
By Willy Thompson
Sitting in my car on the Santa Monica Freeway on my way to an early morning meeting on the west side of Los Angeles, I realized something had to change. My home state for the past 30 years was dramatically a worse place to live. This trip was going to take 2.5 hours in the car to get 45 miles, and that was only one way!
Just a few years earlier I could leave my office, jump in my car, park at the airport, and get into a plane in 45 minutes — then travel to Phoenix and back and still coach my girls’ soccer practice. That was what I loved about where I was and how I lived. Now I was dreading it.
Most people say that they will do things to better their life (lose weight, get more exercise), but they rarely do. The topic of conversation among many of my peers was when do we exit this once-great state, and where should we go? The cost-of-living factor was key. Take your overly priced 1,200-square-foot home and sell it for $400 a square foot and get land and a home for a quarter of that somewhere else. But there is the culture and community of a place.
There also is family. I married into California when I went to college there after growing up in New York and found a great life, a wife, and a home I’d planned on living in forever. All that appeared to change suddenly, but it was more gradual than I realized.
When I first came to California it was a Ronald Reagan red state led by Gov. George “The Duke” Deukmejian (1983-1991). The state was 55/45 Republican and the population was 25 million. I got my first job with a developer in Orange County and couldn’t believe my luck. I was learning I was “lucky” not to be in the real-estate business, as after Jimmy Carter and the terrible interest rates of the late ‘70’s we were into President Reagan’s second term and business/construction was booming again. The first loan I put together was a 10.25% insured construction loan, and the owners thought we’d died and gone to heaven.
As I sat on the Santa Monica Freeway, I was recalling conversations with my boss who had been in the construction and building business since the '60s in southern California. He said the Carter years was the hardest recession he’d ever gone through. I was 22 years old and didn’t know the meaning of the word.
Millions of dollars and hundreds of apartment units later I was in the perfect spot. I owned a home and a great wife and two beautiful girls. I lived in a college town that was walkable and idyllic to live in. While it was a college town and included all the crazy politics that come with that, the energy was great.
But something happened along with way. When the Great Recession of the Obama years set in, I saw many of my friends wonder if they were too late to get out. Home prices fell hard, and many if not all lines of credit were pulled by their banks. Friends that had thought of themselves as wealthy (net worth of their residence included) were shocked at their financial position. I know from many conversations that these few years changed an entire generation of kids that suddenly had their parents reconsider their college choices from private to public in the blink of an eye.
Many commentators reach back to Pete Wilson and Prop 187 as the flashpoint, but I think that ship had sailed years before. Anyone in the construction trades had seen it for nearly a decade. You wouldn’t or couldn’t bid on a “prevailing wage” job since their wage scale was laughable — 40% higher than the market was before they added benefits.
The California I knew had now turned blue, and Jerry Brown was winning his second term. The mood of the state was reeling after Gary Davis had pushed the budget with all the windfall from the Dot Com profits. Now the state was reporting huge losses due to property-tax bills declining. Proposition 13 (which holds property taxes to a set rate from the time you buy) was again the target.
The last straw for me was simple, and that was money.
I had been lucky, and my business remained solid through the recession, but many people were losing jobs. The Left had rewarmed its perennial mantra that the “rich weren’t paying enough.” In November of 2012, the inmates took over the asylum. Proposition 30 “for education” passed easily and raised the state income tax to a high of 13.1%. What made it worse was that it was retroactive to Jan. 1 of that tax year, so it wasn’t like you could have planned for it.
I went down to consult with my attorney and he was already busy with clients asking about how to relocate.
There are now nearly 40 million people in California and the politics are on the socialist downslope. The latest number I saw was 71.5% Democrat to 23% Republican in registered voters. George Bernard Shaw once wrote, “The government who robs Peter to pay Paul can always depend on the support of Paul.” There are plenty of moving trucks headed east from California and very few headed west to California.
I tried my best to stick it out but in the end, I joined the great exodus — before the state financially bleeds out and collapses. We are now happily settled in Tennessee, a state with no income tax and yet rated one of the most financially stable states in the union!
Willy Thompson is a member of The Patriot Post’s National Advisory Board.