California business exodus continues in 2023; since 2005, majority relocate to Texas

The exodus of California businesses continued in 2023, with the greatest number relocating operations to Texas.

According to a tally kept by the California Policy Center in its California Book of Exoduses, at least 237 companies have left California since 2005, citing the state’s ever-expanding regulatory and taxation climate. More than half of them, over 120, relocated to Texas.

Since Gov. Gavin Newsom took office in 2019, companies have increasingly left California, with The Center Square reporting each year on the majority primarily relocating to Texas.

This year was no different. Of the 30 identified by the center that left California through November, more than a third, 11, moved operations primarily to north Texas.

Three California businesses relocated their headquarters to Frisco: Informativ, a credit compliance company, Wiley X, a military eyewear company, and Ruiz Foods.

Kelley-Moore Paints relocated its headquarters to Irving after moving its manufacturing operations to Hurst in 2017. Cacique Foods relocated its headquarters to Irving and opened its dairy processing plant in Amarillo this year.

Quickfee Solutions moved its national headquarters to Plano. AI company, Inbenta, relocated to Allen. Norwalk Frontier’s Communications moved its headquarters to Dallas. Kitchen appliance maker Thermonix relocated its headquarters to Dallas, with expansion plans in the works. Landsee Homes moved its corporate headquarters to Dallas.

The outlier was a wealth management company, KWK Management, which moved its headquarters to Houston instead of to north Texas.

Texas Gov. Greg Abbott has for years touted the state as the best for business and the state that attracts the most business relocations and expansion projects in the U.S. He frequently refers to Texas as the "headquarters of headquarters" because more Fortune 500 companies are located in Texas than in any other state.

Since he’s been in office, he’s worked with the Republican-led legislature to prioritize reducing red tape and regulations, expand job creation programs and grants, skilled workforce training programs and resources to assist small businesses. Their combined efforts, including working with businesses and public private partnerships, have paid off, he’s argued.

In 2023, Texas led the nation in job growth and creation, economic expansion, reported the greatest number of new residents, and continued to break its own employment and economic records.

Texas dominates, Abbott argues, because “of hardworking Texans and endless possibilities for success across our great state. Corporate executives and business leaders across the nation continue to choose Texas because they know that the freedom and opportunity our state has to offer cannot be found anywhere else in the world. Companies are coming to Texas in droves because we offer attractive, pro-growth policies where businesses – and people – can thrive.

"With no state income tax, a reasonable regulatory environment, and a young, skilled, and growing workforce, Texas is at the helm of innovation and economic prosperity. Texas has, indeed, the No. 1 business climate in the nation."

Since 2005, the California Policy Center has identified 237 companies that have left California, with the greatest number – at least 64 – leaving in 2021. The list is not exhaustive but has been a way to track the number of businesses leaving and the reasons they gave for doing so. Factors driving the California business exodus include “California’s high tax burden, over-regulation that strangles businesses of all sizes, poor public schools performance and an ever-increasing cost of living,” the center states.

California experienced its first population loss in recorded state history under Newsom in 2020, with declines continuing since then. Texas’ greatest population gains have been reported under Abbott.

After the 2020 Census, with Texas gaining more residents, it also gained two congressional seats. After losing residents, California lost one congressional seat, The Center Square reported. A projection of a 2030 Census count has California losing an additional four congressional seats and Texas gaining four more, The Center Square reported.