Richard Paul Etcheverry passed away peacefully on June 14, 2024, at the age of 97 in Roseburg, Ore. He was born on August 2, 1926, in San Mateo, Calif. He attended St. Matthews Elementary School and San Mateo High School until his senior year, when he transferred to Commerce High School in San Francisco, where he graduated six months early in February 1944. After graduating high school, he enlisted in the Navy at age 17 instead of being drafted into the Army at age 18.

Richard served in the Navy during World War II serving in the Pacific Theater and was honorably discharged in June 1946.

After returning home from the war Richard embarked on his career in Real Estate with the State of California Division of Tax Deeded Lands in Sacramento. While working, he attended night school for two years at UC California to earn his certificate in Real Estate Practice, Law, and Appraisal. His work with Tax Deeded Lands required much travel throughout the state of California. He decided when his oldest daughter was school age to settle down, so she could attend school on a regular basis. Richard then went to work in Redwood City as a title officer.

In 1967 Richard wanted a different lifestyle away from the crowded Bay Area and moved to Ettersburg in Humboldt County to follow his dream of sheep ranching. He soon found out the sheep ranch didn’t provide the income he expected and went to work as a title officer in Eureka, where he worked until 1980. He then decided to work closer to home and took a job as a bookkeeper at Whitethorn Construction until he retired in 1989. In addition to bookkeeping, he helped with real estate transactions.

After retirement Richard moved back to Eureka, where he enjoyed the company of friends at Humboldt Senior Center and for several years was a member of Goldenaires, singing at several local venues during the holidays. Richard loved to plan and map out many road trips, many of them for more than a month at a time. He traveled by car all over the United States sightseeing, hiking, and exploring each destination. He traveled to Europe, by himself at almost 93 years old, making many friends along the way.

IN MEMORY OF: He was preceded in death by: Mother, Margaret Meyer Greer; Father, Walter Etcheverry, Sr; brother, William (Sonny) Etcheverry; brother, Walter J. Etcheverry; companion, Barbara Denny; granddaughter, Misty Cooper; son-in-law, Ray Lindberg.

SURVIVING CHILDREN: He is survived by his six daughters: Margaret (Joe) Spatafore, Teresa Lindberg, Yvonne Moffett, Giselle Espinoza, Celeste Etcheverry (Scott Greenhow), and Mary Cooper. Companion children: Donna (Bill) Hollenshade, Diane (Jim) Cralle.

SURVIVING GRANDCHILDREN AND GREAT-GRANDCHILDREN: Joey Spatafore, Tricia (Mike) Rodriguez, Crystal (Jan) Dieffenbach, Stacie (Paul) Cabral, Nicolas Carpenter, Anthony Espinoza, Heather Espinoza, Martin Cooper, Anthony Boyd, Jon (Jamie) Boyd, Ben Boyd. Great Grandchildren: Kayla Rodriguez, Amber Dieffenbach, Emily Dieffenbach, Breanna Uyeno, Brandon Uyeno, Otto Boyd, Taylor Boyd, Hunter Boyd, Ryan Cabral, Mariah Cabral. Great Great Granddaughter: Penelope Uyeno.

Graveside service will be held at Oceanview Cemetery, Eureka, on October 19, 2024, at 10 a.m.

###

The obituary above was submitted on behalf of Richard Etcheverry’s loved ones. The Lost Coast Outpost runs obituaries of Humboldt County residents at no charge. See guidelines here. Email news@lostcoastoutpost.com.

Shirley Lorraine Dillon was born April 25, 1950, in Scotia. She was the fourth born of five children and was raised in Fortuna, where she was a Campfire Girl and graduated from Fortuna High. She grew up in a loving household surrounded by faith, traditional family values and lots of laughter.

As a teenager, her parents owned the Ruth Lake Marina, where she spent her summers working with her younger brother, Denny. In 1969 she married Lynn Dillon and became a permanent resident of Mad River, devoting an immense amount of her life to the community. She was an active member of several churches, where she coordinated Christmas pageants and taught Sunday school. She was an EMT, EMT 2 and dispatcher for STAR for over 40 years. She dispatched on the Mad River district for the US Forest Service during lightning events, where she was known as “Mom.” She volunteered at the Trinity County Fair, working in the Homestead and other exhibit buildings; organizing and distributing commodities to the community for over 15 years; volunteering with the local 4-H club by going on camping trips and making the best maple bars for their annual dessert auction. Shirley would also dedicate her time at the school by coming down to the classrooms and reading to the kids, while still being able to make her own family a priority and being there for them whenever they needed a helping hand or an ear to listen.

Shirley was widely known for her generosity, which could easily be seen through her baking. Anyone who knew her knew that she made the best donuts in the county. She also made many extravagant wedding cakes for couples over the years.

Shirley is survived by her loving husband, Lynn Dillon; her children, Julie Morss (Tommy), Jay Dillon (Heather), and Jeanette Rolff; her cherished grandchildren, Briana Lofing-Rolff, Rex Rolff, Kaitlynn Arroyo, Karly Dillon, Jerrad Morss, and Mariah Garlinghouse; and her great-grandchildren, Timberlyn Morss, Gavin Lofing, Phoebe Lofing, Addison Arroyo, and Jameson Rolff. She is also survived by her brother Ted Hulbert, his wife Rosalie, and their sons Greg and David; her sister Dorothy Sinjem, her husband John, and their children Jennifer and Jeff.; her sister Barbara Munz and her son Joe; her brother Dennis Hulbert, his wife Marque, and their daughter Jennai. As well as an endless number of dear friends far and wide. Shirley was preceded in death by her parents Dan and Nita Hulbert, her brother-in-law Jim Munz, her nephews Chris and John Munz, her granddaughter Tommilyn and her grandson Riley Young.

She passed away on August 28, 2024, in Redding. She lived a life marked by devotion to her family, her faith, and her community. A memorial service will be held at 12 p.m. on October 19 at Ruth Community Church, where family, friends, and community members will gather to celebrate her life and legacy. It will be followed by a potluck. Please coordinate with Briana (707) 572-8779, with what side, salad or dessert you’d like to bring.

###

The City of Eureka today received some detailed information from a state housing official about the potential implications of Measure F, aka “The Eureka Housing for All and Downtown Vitality Initiative.”

In a letter to Mayor Kim Bergel and the city council, Melinda Coy, chief of the Proactive Housing Accountability Unit of the California Department of Housing and Community Development (HCD), says that if the measure passes next month, it would not be allowed to take immediate effect.

In fact, because it aims to alter the housing element of the city’s general plan, HCD would need to review those changes to ensure “substantial compliance” with state regulations. The city would need to submit a draft of the changes to HCD at least 60 days prior to adoption, and the state would then scrutinize them to see if they pass muster.

If you’re still a little fuzzy on exactly what Measure F aims to do, here’s a quick summary. It would:

1. Create an “Off-street Public Parking Overlay Designation” on 21 city-owned parking lots, limiting their use to public parking, bicycle parking or high-density residential development. However, any new housing projects on those sites would need to be built atop the existing ground-level parking, with no reduction in the number of spots, and additional parking spaces may be required for new residents. (Six approved and in-progress housing development projects that have received tens of millions of dollars in funding would not meet these parking requirements.)
2. Rezone the former Jacobs Middle School campus property to allow a wide range of additional land uses, including high-density residential for at least 40 percent of the ground area, plus medium- and low-density housing, public and quasi-public uses and a variety of commercial uses. (Worth noting that the land is owned by Eureka City Schools, which is in negotiations to sell a portion of the property to the California Highway Patrol.)
3. Amend the city’s housing element accordingly.

Coy’s letter mostly deals with that last provision, and while she doesn’t come right out and say that Measure F could totally mess up the city’s compliance with state housing law, she does recount the years of collaboration between Eureka and HCD to ensure that the city fulfills its obligation to “affirmatively further fair housing.”

Eureka has been assigned a Regional Housing Needs Allocation (RHNA) of 952 units, meaning it must have specific plans to accommodate that many new housing units, 378 of which must be for lower-income households. Eureka’s met that obligation in part by declaring a collection of city-owned parking lots “surplus” and making plans to develop housing projects there. The city’s adopted housing element was certified as compliant with state housing laws in November of 2022.

But Measure F would amend the city’s “sites inventory,” forcing Eureka to remove those parking lot parcels from its housing element. And while Measure F would allow for the potential of more housing development at the Jacobs site, the state might not green-light the restrictions it would enact on housing development downtown.

Coy explains that, in reviewing the changes Measure F would implement, HCD would check to make sure the newly proposed housing sites are suitable and available for housing development within the planning period. The agency would also check to ensure the city’s modified housing element doesn’t constrain housing development or inhibit compliance with other state housing laws, including “minimum parking limitations within one-half mile of public transit.”

This is a key detail, because one of Measure F’s major provisions is the parking limitations it would apply to those 21 city-owned parking lot parcels — most if not all of which are within a half mile of public transit. In other words, there’s no guarantee that the state would sign off on a housing element that’s been modified the way Measure F describes.

And if the city’s housing element is deemed non-compliant with state housing law, it could have dire consequences, Coy warns, “including ineligibility or delay in receiving certain state funds, referral to the California Office of the Attorney General (AGO), court-imposed financial penalties, the loss of local land use authority to a court-appointed agent, and the application of the ‘builder’s remedy.’”

The city could also face financial penalties, “such as a minimum of $10,000 per month and associated attorney costs … for any action brought by the AGO or HCD to enforce the adoption of housing element revisions.”

The city could also lose its “Prohousing Designation,” which allows Eureka to access certain funding opportunities and be more competitive for others, including money from housing, community development and infrastructure programs.

###

Meanwhile, the most expensive ballot measure in Eureka history just keeps getting pricier thanks to a wide open checkbook from Security National Properties Holding Company, the real estate loan servicing firm founded by semi-local tycoon Robin P. Arkley, II. 

On Monday, the “Yes on F” campaign reported its largest single campaign contribution to date: $363,517.11. With this latest cash infusion, the so-called “Housing for All and Downtown Vitality Initiative” has now raised $1,587,554, with all but $600 of that coming directly from Security National.

To put that amount into perspective, if Eureka voters turn out in roughly the same numbers as they did during the last presidential election then Security National will have spent about $131 per voter. And that’s if you don’t include the company’s $650,000 purchase of the parking lot in front of City Hall, which remains barricaded to prevent anyone from parking there. 

Meanwhile, the “No on F” campaign also reported a new donation: $1,000 from the SEIU Local 2015 PAC. That brings the campaign’s total to $20,537, or about 1.2 percent of what Security National has raised.

###

DOCUMENT: HCD Letter Re: Adopted Housing Element Revision Process – Letter of Technical Assistance

PREVIOUSLY:

• (UPDATING) Pro-Palestine Demonstrations Return to Cal Poly Humboldt on the Anniversary of Last Year’s Hamas Attack
• University Police Seeking Suspect Who Allegedly Threw Paint at People on Campus During the Pro-Palestine Protests Monday

###

A standoff between pro-Palestine and pro-Israel protestors at Cal Poly Humboldt climaxed Monday with a man throwing paint at the pro-Israel activists. 

The protests, held October 7 in the UC quad in the middle of campus, started at around 11 a.m. About six people were set up at a table with signs saying they were Jewish or Israeli, and inviting people to talk to them about the Oct. 7, 2023 Hamas attacks on Israel. About 10 were with the pro-Palestine group. Over the next two hours, that number would swell to about 20 people. 

By about 12:30, the pro-Palestine demonstrators were chanting, waving flags and beating a set of bongos when a man wearing a yellow hoodie with a pot full of red liquid showed up. He started using a soup ladle to paint a circle-A “anarchy” symbol on the pavement, then began to fling the liquid at the pro-Israel activists, splattering several of them. People from the pro-Israel crowd were also subjected to name-calling. 

“This represents the blood of Palestinian martyrs, and the blood of students when the cops fucking beat trans[gender] indigenous people last semester!” he said. “The school is trying to erase colonial violence, and we won’t let them!”

He left soon afterwards. The pro-Israel group cleared out at around 3 p.m., and the last of the pro-Palestine group were gone from the quad by about 6 p.m. 

The University Police Department does not show a call for service around this time on the quad, though they did show up for a report of an assault at 4 p.m. Classes in Siemens Hall were moved.

Kira Trinity, one of the activists hit with liquid, said she could get some of it off in the sink, though the shirt she was wearing is ruined. Trinity, a Humboldt alumnus, was there with the “HumJews” organization a campus club to try to share her views on the Israeli occupation of Gaza. When the Palestinian protestors started waving their flags, she left to get her Israeli flag. When she returned, the paint-thrower got her and several of the people she was with. [CORRECTION: “HumJews” is an Instagram account; it is not related to the campus club Trinity was there to support.]

Trinity believes the liquid was likely a kind of watered-down acrylic mixture. 

Community member Oren Nahshon was with HumJews recording the altercation on several cameras in an attempt to document any ill will towards them. Much of his camera equipment was hit with the liquid, as well as all of his clothing. Nahshon said people encouraged the liquid thrower to target him.

“One of them got very close to me and started barking like a dog,” Nahshon said. “He told [the guy with the paint] ‘Don’t waste the paint on the floor, throw it on him.’ So he sprayed the paint on me three times in a row…I’m very happy I was there, because if that’s how they behaved in front of a camera, I’m sure that if the camera was not there, whoever was there talking could have been hurt.”

At least one person has filed a police report. Cal Poly Humboldt sent out a press release yesterday asking for information. 

Political graffiti is becoming an expensive problem for Humboldt. In an email obtained by the Outpost, Director of Facilities Maintenance Travis Fleming claimed it costs over $1,000 every day to clean graffiti, and on one day alone there were 20 complaints filed about Middle East-related messages.

Trinity hopes that the perpetrator gets jail time, and Nahshon said he wants their identity exposed, but on the pro-Palestine side opinions are very different. 

Pro-Palestine activist Jack McCann was protesting in the quad Monday while the man was throwing paint. He doesn’t think the thrower did anything wrong. 

“I am not going to condemn someone who does paint, especially when you know we are trying to call attention to the much more significantly horrific crimes that have been committed and are currently being committed,” McCann said. “You know, a little bit of spilled paint doesn’t seem like that big of a deal in comparison to potentially hundreds of thousands of civilians that have been slaughtered over the past year.”

McCann said though the Jewish people in the quad did not personally kill anyone in Gaza, he thinks they are complicit because they he believes they are advocating genocide. McCann does not sympathize with them, paint or no paint. [UPDATE, 4:53 p.m.: McCann just called the Outpost with a clarification: He said that he believes that everyone is complicit, not just the Jewish people on the quad that day.]

“I do have a message for the police, but also for anyone helping the police try to find this person,” McCann said. “That is: Rest in piss.”

Insults and actions like that are what make students like Trinity feel unsafe on campus. She compared the experience to being a Jew forced to wear the star of David by the Nazis. 

“This was a traumatic experience,” Trinity said. “We’re there to spread peace and understanding and kindness, and what we got was hate crimes.”

Cal Poly Humboldt has not yet responded to a request for comment. 

Eureka High School release: 

Dear Eureka High School Families,

This morning, a bomb threat was reported at Eureka High School. The Eureka Police Department (ED) responded promptly and conducted a thorough investigation. A student of interest was identified and detained and there is an ongoing investigation.

As a precaution, all students and staff were safely evacuated during the investigation. We are pleased to report that everyone is safe, and regular school operations have since resumed.

We understand the frustration some parents and guardians may feel about not being notified immediately. Please know that the safety of our students and staff is always our top priority. We share updates and information as soon as it is safe to do so.

We appreciate the quick response from EPD and the cooperation of our students and staff during this incident. The safety and well-being of our school community are always our foremost concern. Thank you for your continued support.

Sincerely,
Rob Standish,
Principal Eureka High School

Press release from the Arcata Police Department:

On 10- 8-2024, at approximately 4:30 in the afternoon, officers from the Arcata Police Department observed smoke rising from the center of the Arcata Plaza. When officers investigated, they determined a man had started a barbecue, set up a pop-up and stated he intended to sell food at the location.

The subject was, advised by officers that Arcata Municipal Code prohibited the erecting of structures on the plaza, open flame on the plaza, or selling prepared foods without proper permitting. Officers requested the subject, take down the structure and cease his operations.

The officers returned a few minutes later and observed that the subject was continuing his activities. The man was advised that he was going to receive a citation for the continued municipal code violations and requested the man identify himself.

The man later identified as Michael Steelman, 21 of Arcata, refused to provide identification or his name to the officers. Officers further advised Steelman that if he refused to identify himself, he could be arrested. After numerous requests, Steelman became increasingly agitated despite the officer’s attempt to de-escalate by explaining repeatedly if he would provide his name, he would simply receive a citation.   

Mr. Steelman continued to refuse to provide his name, at which time officers advised Mr. Steelman he was being placed under arrest. Upon attempting to take Mr. Steelman in custody, he violently resisted, and a struggle ensued. Ultimately Mr. Steelman was placed under arrest and booked into Humboldt County Jail on the following charges.  

• PC 69 -Obstruct/resist officer (Felony)
• 148(A)1PC- Obstruct/resist officer (Misdemeanor)
• 148.9(A) PC- False Identification to a Police Officer

When oil giant Chevron said over the summer that it would be moving its corporate headquarters to Houston from San Ramon, the headlines were dire. “Chevron Dumps California for Texas After 145 Years,” read one. Another called the move a “Snub to California.” A third noted that the departure came “as Regulations Mount in Golden State.”

The gloomy headlines illustrate how the press and corporate leaders often oversimplify big-company departures from California, leading citizens and state officials to under-examine the factors that lessen the impact of corporate departures and overstate their importance. The same type of doomsaying has played out with other big companies whose headquarters are leaving or have left the state, including Tesla, Oracle and SpaceX.

In Chevron’s case, discussions of the exit tended to miss or downplay a few key points. Despite talk tying the move to regulations and climate-change litigation in California, CEO Mike Wirth said repeatedly that the relocation was about moving to “the energy capital of the world,” not policy differences with state officials. Also, Chevron already had three times as many workers in Texas as in California at the time it decided to move. And few observers bothered to note the major operations Chevron would retain in the state, including refineries and oil fields.

With other exits, pundits often don’t examine the true effects on state tax revenue. Or take into account the fact that some companies leave key people in California or eventually return. And expansions by companies or startups that pop up here don’t get as much attention, either, the governor and some economists say.

“This is a long narrative in California — about businesses moving out,” said Ted Egan, chief economist for San Francisco. “At the same time, you need to talk about businesses starting up.”

Understanding the nuances of corporate exits is important because the departures can influence state policy and affect confidence among consumers and businesses. For example, the prospect of tech companies fleeing the state was raised this year by opponents of a California bill, eventually vetoed by the governor, that would have made tech companies test for critical harms from large artificial intelligence systems. Similarly, when Democratic Assemblymember Alex Lee of San Jose proposed a wealth tax last year, the California Chamber of Commerce said in a letter to him that the tax would likely contribute to “California’s business and resident exodus.” It did not pass. The Chamber used identical language in 2022 when successfully opposing various tax increases to fund a single-payer state health care program.

Despite complaints about high taxes, expensive housing and burdensome regulations — grousing that has been going on for decades — the state remains the national leader both for tech startups and for its share of big companies.

“I agree California is a more onerous place to do business,” said David Neumark, a UC Irvine economics professor who has studied relocations. “But it’s not like we’re some basket case.”

When leaving looks like staying

Some companies that recently made high-profile headquarters exits from the state have also either added more California employees or kept the lion’s share of workers here. Any remaining employees in California will continue to pay the state’s personal income tax.

Take Oracle, for example. The tech company announced in 2020 that it was moving its headquarters to Austin from Redwood City, leading to headlines like “Oracle Moves Headquarters to Texas, Joining Valley Exodus” and worries over “California’s higher operational costs and hefty taxes,” not to mention “steeper cost of living,” according to a couple of articles about the news. And yet Oracle as of this past spring still had almost triple the office workers in California than it has in Texas, 6,900 vs. 2,500, Bloomberg reported. A company spokesperson did not return a request for comment. But Redwood City’s data showed the company was still its biggest employer as of 2023. Though Oracle eliminated about 3,000 jobs in Redwood City over the past decade, it retains about 3,757 workers there, or more than 7% of the city’s workforce.

Oracle continues to pay taxes in California, though because tax records are confidential, it’s hard to know exactly how much. That includes not just sales taxes but corporate income taxes too; moving a headquarters does not necessarily mean a company escapes those.

“Corporations’ tax has very little to do with where their headquarters or employees are located,” said Brian Uhler, deputy legislative analyst with the state. “For a multinational business, they earn profit in California and outside California. California attributes profits to the state based on what share of a company’s national sales occur here.”

The state taxes corporations based on their sales, property and investments. So if a company earns revenue from sales or transactions in California, the company will pay taxes here regardless of where its headquarters is based. Companies also have to pay employment taxes for their workers based here. And certain types of companies, such as banks and other financial institutions, pay higher or additional taxes.

Another tech company that continues to contribute tax revenue to the state: Hewlett-Packard Enterprise, which announced it was relocating its headquarters to Texas in 2020. Even so, company spokesperson Adam Bauer said last month that the company has about 3,700 employees in Texas and about 3,600 in California. And on the company’s website, there were recently more job openings in California (45) than in Texas (34), including a few sales positions, a Northwest account executive and a “supplier relationship owner” for Nvidia, which is based in California.

“Corporations’ tax has very little to do with where their headquarters or employees are located.”
— Brian Uhler, deputy legislative analyst, state of california

A third company that “left” California without really leaving is Tesla, which has actually grown in the state since its departure. The electric car maker moved its headquarters from Silicon Valley to Austin in 2021. CEO Elon Musk told shareholders that the company’s factory in Fremont was “jammed” and that housing costs in the state were high, making it tough for workers to live near the facility. Musk had also clashed with local health officials about COVID-related shutdowns. The New York Times framed the relocation as a “Blow to California.”But three years later it doesn’t seem like a particularly severe blow. In 2022, the year after the move, the company “grew to 47,000 employees” in California, it said in a blog post, and ”our production footprint continued to increase.” Then, the next year, Tesla announced it would put its engineering and AI headquarters in Palo Alto, reportedly expecting to locate 1,400 employees in Hewlett-Packard’s former headquarters there.

California’s Tesla experience makes it hard not to wonder how impactful two other recently announced Musk-related relocations will be. In July, the billionaire said he was moving the headquarters of social media company X and rocket builder SpaceX to Texas from California. Musk cited a law recently signed by Gov. Gavin Newsom that bans the state’s school districts from requiring parents to be notified of a change in their child’s gender identification. Musk has a transgender daughter and has been publicly critical of transgender people’s rights to choose preferred pronouns. He called the law “the final straw” on top of “many others that preceded it, attacking both families and companies.”

It’s not clear how many California X and SpaceX employees will actually end up in Texas. A source told the Washington Post that the 120 employees at X headquarters in San Francisco will move to Musk-linked offices in San Jose and Palo Alto, but since then the company has reportedly said in legal filings that it will move X’s headquarters to Bastrop, Texas. LAist quoted experts saying that moving SpaceX to Starbase, Texas, will be complicated and time-consuming since the company’s headquarters in Hawthorne is a huge aerospace facility. X and SpaceX did not respond to requests for additional information.

Similarly, Chevron spokesperson Randy Stuart said the company has not yet decided which of its positions in San Ramon will relocate to Texas. The relocation is not effective until Jan. 1 and the company expects it will take five years to migrate most corporate functions to Texas. Some 2,000 Chevron employees work in California versus 7,000 in Texas but that includes people outside of headquarters working on Chevron’s operations in this state, including crude oil fields, technical facilities and two refineries, which range from the San Joaquin Valley to Richmond to El Segundo.

Growth can be hard to notice

While big departures like Musk’s get a lot of attention, expansions and new businesses within California tend not to.

In a recent Instagram post, Gov. Gavin Newsom tried to combat what he labeled “misinformation” about California’s economy by touting in-state expansions by well-known companies such as Visa, Ford Motor, Nintendo and Disneyland. He added that “the world’s leading AI companies are expanding right here in California.”

The governor may have a point about those expansions. There weren’t very many headlines — if any — about Visa recently opening a big new office in San Francisco; Ford’s plans to roll out a new electric-vehicle development center in Long Beach early next year; Nintendo’s intention to open a store in San Francisco next year; and Disneyland’s multibillion-dollar expansion over the next decade that promises jobs and community benefits for the city of Anaheim.

Statewide, about 291,000 new business entities have registered in California this year, according to the secretary of state’s office, compared with 215,000 a decade ago. And that number does not include sole proprietorships, which do not register with the state.

Egan, San Francisco’s chief economist, noted that new AI companies are taking office space in San Francisco, helping the city’s slow recovery from the pandemic-induced boom in remote work. PitchBook, which keeps track of capital markets, recently ranked San Francisco the top city in the world for startups. New York and Beijing were second and third. And a report from PitchBook and the National Venture Capital Association showed that the Bay Area and Los Angeles combined had a total of 746 venture capital deals in the fourth quarter of 2023, compared with 402 deals in New York, the runner-up.

In addition, for the first time since 2014, California as of June has the highest number of Fortune 500 companies, 57, while Texas and New York have 52 each. Newcomers to Fortune magazine’s annual ranking of the world’s biggest companies based on their revenue included California-based companies DoorDash, Workday, Prologis and Clorox.

“I agree California is a more onerous place to do business. But it’s not like we’re some basket case.”
— David Neumark, economics professor at UC Irvine

Sarah Bohn, labor economist at the Public Policy Institute of California, said the headquarters moves “warrant attention, at a minimum. These moves make headlines, and that’s an important force for how people are feeling about doing business in California.”

Bohn said she is currently doing research to quantify the effects of corporate departures, but that it’s important to remember that there are always businesses moving out of, starting up in, or dying in the state.

Neumark, the UC Irvine professor, is working with Bohn on that research. He also co-authored a couple of research papers that examined the issue in 2004 and 2007, so he knows the concern about businesses leaving the state is not new. Neumark saw the same worries back then, during the Arnold Schwarzenegger era. There was a lot of talk about companies moving out of California and some “crazy political stuff,” he said. That included the actor-turned-governor showing up at a Las Vegas business with a van marked “Arnold’s Moving Co.” to symbolically help that company move back to California.

Neumark and his fellow researchers found in 2007 that California did not lose a significant number of workers due to business relocations, only about 11,000 jobs a year out of more than 18 million jobs from 1992 to 2004. In the same period, total employment in the state rose by around 106,000 jobs per year, driven by the creation and expansion of new businesses, according to data presented in the paper. The researchers found no evidence of a mass business exodus, saying that the net losses in the number of businesses that left and jobs lost as a result were negligible: 0.05% of businesses in California moved to other states during each of the two worst years, 1993 and 1994; and 0.1% of jobs were lost to relocation during each of the two worst years, 1997 and 1998. He mentioned that a substantial portion of California’s economy is service-oriented, “and restaurants and hospitals don’t move to other states.”

Complaints from departing corporations

There is no denying that some business executives are fed up with the state.

After Chevron’s exit last month, the president of moderate business group Bay Area Council, Jim Wunderman, said in a written statement: “It’s an embarrassment for California that we’ve lost so many global companies because of misguided policies that make it incredibly difficult to do business here.”

In an interview with CalMatters, Wunderman said it’s time for a “reckoning.” He said lawmakers and officials need to rethink policies that make it hard to build housing, or drive up the cost of energy. “I understand we’re going through an energy transition. Do we have to do it in a way that we exacerbate economic problems in the state?”

He pointed to a bill, recently signed into law by the governor, that aims to curtail traffic and air pollution from warehouses. “We’re constantly regulating things to make it more difficult for businesses. (The warehouse bill) particularly affects the Inland Empire, whose economy is built around that industry.” By possibly reducing the number of job opportunities at warehouses, Winderman said the new law could hurt the very people it’s trying to protect.

California’s flat corporate income tax rate of 8.84% of a company’s net income is the sixth highest in the country, according to the right-leaning think tank Tax Foundation. Conservative legislators also criticized a recent decision by the governor and Legislature to suspend certain business tax deductions and limit tax credits for three years to close the budget deficit, saying such suspensions have become too common.

On the other hand, the state’s corporate tax rate has actually declined over the past few decades, with state lawmakers slashing it from 9.6% to 9.3% in 1987, then to its current rate in 1997. The California Budget & Policy Center, a left-leaning think tank, said in a 2022 analysis of state data that corporate tax breaks have lessened the tax burden on California businesses over the years.

“We’re constantly regulating things to make it more difficult for businesses.”
— Jim Wunderman, president of Bay Area Council

Ahmad Thomas, CEO of Silicon Valley Leadership Group, which advocates for big tech companies, said, “The challenge we have is the cost of doing business and operating in California continues to increase. How do we mitigate that?”

Thomas said California’s “competitive advantage continues to be chipped away at year after year by competition” that is global. He mentioned that there needs to be “more innovative solutions… around our cost structure connected to our tax policy,” as well as more affordable housing.

He wants industry and policymakers to work together to drive down the cost of living here, while trying to minimize additional taxes to businesses.

Still, business leaders get something in exchange for grappling with those challenges: access to capital, a skilled workforce, world-class universities and more.

“Full stop, I believe there is no better place to locate, grow and scale a company than in California,” Thomas said.

And not all state policies and laws drive business away. They help create them.

Bohn of the Public Policy Institute of California said the state continues to have policy levers, such as tax credits, that it can use to target businesses it wants to keep in the state.

“Full stop, I believe there is no better place to locate, grow and scale a company than in California.”
— Ahmad Thomas, CEO of Silicon Valley Leadership Group

Case in point: Newsom boasted last year during a press conference with Musk about Tesla’s partial homecoming that California legislation and policies on clean vehicles helped spur the company’s rise to electric-vehicle dominance. It is the most valuable automaker in the world and responsible for the bulk of Musk’s wealth, which reportedly will soon stretch beyond $1 trillion. Tesla’s success wouldn’t have happened without California, where the company has received at least $3.2 billion in direct and indirect subsidies from the state, with the bulk of those being tax credits for zero-emissions vehicles, according to estimates from Newsom’s office reported by the San Francisco Chronicle.

At the press conference, Musk stood stiffly by as Newsom bragged about the state’s pivotal role. But then the billionaire also made an admission that might startle those who think California businesses are beset by red tape and entitled workers: Tesla’s Fremont factory is the most productive automotive plant in North America.

“It will probably be about 600,000 or more cars this year,” Musk said. “California is a tremendous manufacturer as well as a place of engineering innovation.”

That’s a point, Newsom added, “which is, again, often so lost.”

###

CalMatters.org is a nonprofit, nonpartisan media venture explaining California policies and politics.