55 replies to this topic

[Rich_T]

The 95% who are moving to Texas will be hard pressed to sell their homes (those who are homeowners). And moving ain't cheap, either - I'd be surprised if the company is paying for the moves.

[stangage70]

The 95% who are moving to Texas will be hard pressed to sell their homes (those who are homeowners). And moving ain't cheap, either - I'd be surprised if the company is paying for the moves.

If priced right, the homes will sell. Waste Connections might help make this work for its employees.
A major corporation is likely to pay for the moves. Why the surprise?
A quote in today's Sac Bee suggested they are spending $15M to make the move, which involves 100 employees.
They won't be very successful in the move without helping their top employees go along.

I don't think I will fit in well with most of Texas. Austin is the possible exception.
http://www.texastribune.org/texas-education/public-education/texans-dinosaurs-humans-walked-the-earth-at-same/

[andy]

It might make sense for their business, but I don't like them throwing the state under the bus...some folks do manage to thrive here.

This chart (http://www.taxfounda...ia-20110223.pdf) correctly points out that the California tax burden is higher than average (10.6% vs. 9.8% for teh country), BUT read between the lines - folks here pay about $368 more a year (big whup) but make on average $3,000 more a year in income.

I don't know about you, but I'll take that deal. I love this place and I think it's worth it.

California is the best place in the world. It is unique and precious, which means the state and local governments will tend to make doing things here a bit more difficult just to prevent harm...that makes it a more expensive place to operate than most, but so are other unique and special locations. For example, our geography means that air pollutants can't leave so we need stricter air rules than states with millions of acres of prairie that are washed clean by the breeze. We can't help that. You can live in cheaper places, true, but not better ones.

I wish Waste Connections would stay - they are a good local company. And I wish them well, but they can have Texas. I've been there and it's not for me. Just because this place isn't for them doesn't mean they need to bad mouth us - we've treated them pretty well.

[Dartmore]

The fact they are moving is very sad, for both Folsom and California. I hate to see a good employer and corp citizen leave the area.

[Robert Giacometti]

Robert-- I didn't at all feel you were attacking me.

I do agree we don't want to lose jobs to other states. I just think it's bad when states compete to "race to the bottom" -- choking off public spending so they can claim they have the lowest taxes.

Here is a snippet about Texas:

The study was based in part on U.S. Census data, which shows that Texas continues to be -- as the Texas Medical Association put it a few years ago -- "the uninsured capital of the United States."

More than 26 percent of Texans are uninsured, the highest rate in the country. That means that about 6.3 million Texas -- men, women and children -- have no health insurance. An analysis by the Texas Medical Association a few years ago showed that children were especially disadvantaged in Texas: a full 30 percent of Texas kids were uninsured in 2006-2007.

Also:

But here’s the thing: While low spending may sound good in the abstract, what it amounts to in practice is low spending on children, who account directly or indirectly for a large part of government outlays at the state and local level.

And in low-tax, low-spending Texas, the kids are not all right. The high school graduation rate, at just 61.3 percent, puts Texas 43rd out of 50 in state rankings. Nationally, the state ranks fifth in child poverty; it leads in the percentage of children without health insurance. And only 78 percent of Texas children are in excellent or very good health, significantly below the national average.
(this was from the New York Times)

Where does California rank in all of this compared to Texas?

The bottom line is this company is taking 130 jobs out of State. From what I heard on TV that translate into about $90 million economic loss for California and a gain for Texas. So there will be less to spend on the kids in California and the Kids in Texas will have more.

What is MOST important is to look ahead to the future and California is facing some huge challeneges that no one seems to be willing to address. The State is facing some Trigger Budget cuts from the unrealistic budget that was approved last year. Schools and children will face the brunt of these cuts!

Most of us might agree we wouldn't want to move anywhere else, but our quality of life will be decreasing at a much faster pace than other states that are enticing jobs to relocate there. Successful Business owners see and understand this and are making long term strategic decisions to get out before everything collapses.

Its amazing to me so many people keep sticking their heads in the sand and refuse to reevaluate their beliefs, based upon the realities that are occuring around them. ( BCF, thsi isn't being directed at you)

[Robert Giacometti]

It might make sense for their business, but I don't like them throwing the state under the bus...some folks do manage to thrive here.

This chart (http://www.taxfounda...ia-20110223.pdf) correctly points out that the California tax burden is higher than average (10.6% vs. 9.8% for teh country), BUT read between the lines - folks here pay about $368 more a year (big whup) but make on average $3,000 more a year in income.

I don't know about you, but I'll take that deal. I love this place and I think it's worth it.

California is the best place in the world. It is unique and precious, which means the state and local governments will tend to make doing things here a bit more difficult just to prevent harm...that makes it a more expensive place to operate than most, but so are other unique and special locations. For example, our geography means that air pollutants can't leave so we need stricter air rules than states with millions of acres of prairie that are washed clean by the breeze. We can't help that. You can live in cheaper places, true, but not better ones.

I wish Waste Connections would stay - they are a good local company. And I wish them well, but they can have Texas. I've been there and it's not for me. Just because this place isn't for them doesn't mean they need to bad mouth us - we've treated them pretty well.

I thought Texas didn't have a State Personal Income Tax?

If that is the case then somebody making $2 million per year would net almost $230,000 more per year in take home pay, by moving their business to Texas out of California. One could use that savings and fly to the beach or Tahoe quite a few times and still be money ahead!

Whats wrong with them being direct about why they are moving? I'm grateful they are saying so because MAYBE enough people will change their views to prevent these things from happening again in the future.

I'd sure like to hear from those of you that are happy with the way things are here in California on where do you propose to cut in Government to offset the lost revenue with this companies moving?

[folsom500]

The 95% who are moving to Texas will be hard pressed to sell their homes (those who are homeowners). And moving ain't cheap, either - I'd be surprised if the company is paying for the moves.

Considering that most of those going with the company are important upper level executives I would surmise that Waste Connections is putting up a lot of money for them to move to Texas and also likely to assist in selling their homes. I have been in this situation in the past and many companies pay good money to keep key employees even going to the edge and purchasing the homes in the short term and selling them... WC has lots of cash to do this...

[SacKen]

People always like to defend California by pointing out things about the other places, studies about taxes, etc. None of that matters. Companies are choosing to leave the state and are abandoning further investment in the state. People with the means and assets worth protecting also leave the state.

A company I worked for moved their headquarters from SoCal to another state a couple years ago for similar reasons. They are also funneling much of their work to their locations outside of CA because of the high cost. Simply put, when they bid on contracts that will be worked by their California employees, they must use a significantly higher hourly rate in the bid or eat the higher cost.

Regardless of whether you or any author of a link you direct us to agree with the reasons, this loss of jobs and revenue is real. The reason is almost always the cost and unfriendly business environment in California. I trust the analysis of the people that are making the decision to move since they are actually affected by their decision to move and I doubt would choose to do so simply out of spite or some other non-financial reason.

[rpo]

I thought Texas didn't have a State Personal Income Tax?

If that is the case then somebody making $2 million per year would net almost $230,000 more per year in take home pay, by moving their business to Texas out of California. One could use that savings and fly to the beach or Tahoe quite a few times and still be money ahead!

Whats wrong with them being direct about why they are moving? I'm grateful they are saying so because MAYBE enough people will change their views to prevent these things from happening again in the future.

I'd sure like to hear from those of you that are happy with the way things are here in California on where do you propose to cut in Government to offset the lost revenue with this companies moving?

Where did your $2m figure come from? The WM CEO barely makes more than that (2.48m), so I think you are shooting way too high with that figure. That is not realistic for the average employee, even at the corporate headquarters. If the CEO was moving by himself, then it would make since.

For the average employee, if all other taxes were the same from state, then your hypothesis would be almost correct. The first problem is your figure is based on the gross tax rate and not the effective tax rate. If the employee pays federal income taxes, then their burden would be somewhat lower. That is not a big deal though. The main problem are property tax rates are 2-4x higher than California. People typically spend the same amount on housing despite price differences from region to region. (aka: Someone selling a home in CA would likely spend the same amount on a home in TX based on the same amount of income.)

The difference in tax burden for a family of three making $150,000 is $8,909 or 5.9% lower in Texas vs California, NOT taking into account increased property taxes. That part sounds great, except that incomes are 8% lower for the same positions in Texas. In the future, Waste Management gets to look forward to paying their corporate employees, on average, 8% less than here in California. That is a 2% pay cut. This may not apply to the current employees, but it would most certainly factor into COL increases and new hires from employee attrition. The corporation WINS and the employees LOSE.

P.S. My figure above for incomes being 8% lower is the most conservative figure I could find. Quite a few others pointed towards 30% lower, which would skew even further into the corporations favor and screw the employees more.

[Rich_T]

Considering that most of those going with the company are important upper level executives I would surmise that Waste Connections is putting up a lot of money for them to move to Texas and also likely to assist in selling their homes. I have been in this situation in the past and many companies pay good money to keep key employees even going to the edge and purchasing the homes in the short term and selling them... WC has lots of cash to do this...

Thanks for the info. I know nothing about the company. If it was their headquarters, then I guess I'm not surprised if they help the people relocate. I was thinking earlier that it was some company outpost. The reason I wrote that I would be surprised if they helped people move is because lots of companies tend not to do that anymore, to save money.

Either way, it's an unplanned life change for the employees involved. Too bad they have to leave Folsom on someone else's terms.

[Darth Lefty]

If they weren't giving the employees an incentive to move, they wouldn't be moving. I imagine there's raises and bonuses and assistance with house sale, as well as the move itself. All this up front to be amortized by the savings from operating in TX.

[bordercolliefan]

Either way, it's an unplanned life change for the employees involved. Too bad they have to leave Folsom on someone else's terms.

You haven't mentioned what is often the biggest dilemma facing employees: the other spouse's job. Many families/couples will have to choose whether to keep H's job or W's job.

This can be very hard in some situations. In our family, H is the bigger wage-earner by far, but I work as an attorney... if we were forced to move out-of-state, I lose my livelihood. Tough choices for families...

[Rich_T]

You haven't mentioned what is often the biggest dilemma facing employees: the other spouse's job. Many families/couples will have to choose whether to keep H's job or W's job.

This can be very hard in some situations. In our family, H is the bigger wage-earner by far, but I work as an attorney... if we were forced to move out-of-state, I lose my livelihood. Tough choices for families...

Yes, definitely. Whole families are thrown into a sudden, unplanned chaotic situation, with tough choices to make.

If they weren't giving the employees an incentive to move, they wouldn't be moving. I imagine there's raises and bonuses and assistance with house sale, as well as the move itself. All this up front to be amortized by the savings from operating in TX.

The incentive might be as simple as maintaining a paycheck.

[Redone]

The 95% who are moving to Texas will be hard pressed to sell their homes (those who are homeowners). And moving ain't cheap, either - I'd be surprised if the company is paying for the moves.

Some employers are covering the spread and avoiding a short sale for their employees as part of the overall relocation package ...

[rpo]

The incentive might be as simple as maintaining a paycheck.

Very true. With the employment climate in Sacramento, that is quite possible and corporations would likely take advantage if it would save them money by not offering higher pay as an incentive. I bet they sold the "lower cost of living" instead!