Three years ago, California lost its #1 status as the state with the most new private business funding — Texas took over the top spot. Since then the disparity between the two states has grown dramatically. In 2013, $87.4 billion was invested in Texas by private equity funds. California businesses received $54 billion.
http://www.privateequityatwork.com/wp-content/uploads/2014/06/PEGCC_InfoGraphic_051512b.pdf
This spread is more important when one considers the population of these two mega-states:
California 38,333,000
Texas 26,448,000
http://en.wikipedia.org/wiki/List_of_U.S._states_and_territories_by_population
Hence even with California having a population 44.9% bigger than Texas, Texas businesses scored 61.8% more private investment dollars.
Stated differently (and more starkly), Texas received $3,304 of new investment per capita, while California received only $1,408 per person. Texas received more than DOUBLE the per capita investment of California — 139.7% more to be exact.
It’s not just the dollar differential that’s disconcerting. It’s the TREND LINE. I don’t have the figures longer term, but clearly California is declining, while Texas (along with many other states) is becoming more attractive for new and (particularly) expanding businesses.
If that’s not enough to give Californians cause for concern, here’s a five more “California vs. Texas” comparisons to ponder:
1. The national “supplemental” (adjusted for cost of living — the new BLS standard) 2010-2012 poverty rate is 16.0%. Texas is higher, at 16.8%.
But California’s supplemental poverty rate is by far the worst in the nation at 23.8%. We are 48.8% higher than the average for the other 49 states. Indeed, the CA poverty rate is 20.2% higher than 2nd place Nevada. We are 45.1% worse than Texas.
2. According to recent U.S. census figures, the 2009 median household income in California is significantly higher than Texas.
CA — $58,931
TX — $48,259 — 18.1% less than CA
But, ADJUSTED FOR THE COST OF LIVING, the Texas median household income is significantly higher than California.
TX — $53,009
CA — $44,456 — 16.1% less than TX
http://en.wikipedia.org/wiki/Household_income_in_the_United_States#Median_income
3. California’s huge GDP (8th largest in the world — down from 5th largest in 1999) is often touted as proof positive that we are more financially successful than other states. Of course, not mentioned is that CA is by far the most populous state. A better gauge is the per capita GDP. Here are the 2012 figures:
CA — $46,029
TX — $46,498
More important, the Texas GDP is growing significantly faster than California’s. And note that the GDP is NOT adjusted for inflation!
4. California residential electricity costs an average of 27.6% more per kWh than the national average. CA commercial rates are 44.4% higher. For industrial use, CA electricity is 74.4% higher than the national average (October, 2013). NOTE: SDG&E is even higher. California industrial rates are more than DOUBLE the Texas rate.
http://www.eia.gov/electricity/monthly/epm_table_grapher.cfm?t=epmt_5_06_a
5. 500 top U.S. CEO’s surveyed rank California “the worst state in which to do business” for the 10th straight year (May, 2014). Texas is again ranked the best state.
http://chiefexecutive.net/best-worst-states-for-business-2014#ranking