Gone to Texas

By: Lucy Nashed, TLR Communications Director

2018 was a year of whirlwind travel for me, from New York City to San Angelo, Texas and several stops in between. But there was one trip I looked forward to more than the others: a handful of balmy November days in San Diego to attend and speak at the American Tort Reform Association’s annual conference.

Never having been to San Diego before, I’d heard stories about just how incredible a place it is to visit.  I pretty quickly figured out what all the fuss was about. Walking through Little Italy and Coronado Island, I found myself looking around and wondering what it would be like to live in a place where the average daily temperature hovers around 75 degrees (more importantly, where the average daily humidity hovers around zero) with miles of pristine Pacific beaches at my disposal.

And almost as quickly as those thoughts popped into my mind, I remembered something my old boss, Gov. Perry, used to say when talking about California’s economic policies.

“How badly do you have to screw this place up to make people want to leave?”

Pretty badly, it turns out.

According to the Dallas Business Journal, “a record number of companies are leaving California for states with a better business climate, and a new report shows that Texas remains their No. 1 destination.”

The article quotes Joseph Vranich, president of Spectrum Location Solutions, who looked at the number of relocations from California to Texas in 2016 (the most recent year available).

“The study estimates that 1,800 relocation or ‘disinvestment events’ occurred in 2016… setting a record yearly high going back to 2008. About 13,000 companies left the state during that nine-year period. Of the 1,800 events, 299 of those departures landed in Texas.”

That’s pretty incredible when you consider, as Vranich says, that moving jobs, homes and families is a major undertaking for most Americans.

“’A lot of people don’t want to be more than one hour from other members of their family they might be leaving behind, or their good friends or their favorite country club—whatever it is… For Texas to do as well as it does attracting California companies is really remarkable in and of itself.’”

Aside from the tax and regulatory policies that make living and running a business in California difficult, one of Vranich’s observations will strike a chord with anyone interested in Texas’ legal system.

“The top reason to leave California is no longer high taxes, although that still ranks highly, Vranich said.

‘The legal climate has become so difficult that companies should consider locating in jurisdictions where they will be treated fairly,’ he said.”

Can you imagine living in a state whose legal system is so unfair, your livelihood depended on leaving?

Texas has been there, done that. Once known as the Wild West of Litigation, it was a place job creators avoided because of the risks and costs of being sued.

Today, Texas is the land of opportunity in America. But we shouldn’t take that for granted. Erosion in the quality of our legal system is an economic red flag that we would be wise not to ignore.

There’s a reason for the old saying, “Gone to Texas.” Let’s work to keep it that way.