A recent report from the Hoover Institution highlighted the ongoing exodus of companies pulling their headquarters out of California to escape the Golden State’s high tax and regulatory environment. 

According to the report, released on Oct. 25, California business headquarters in 2021 left the state at twice their rate in both 2020 and 2019 and at three times their rate in 2018. 

FILE: In an aerial view, shipping cranes stand at the Port of Oakland in front of the San Francisco skyline on October 24, 2022 in Oakland, California. (Justin Sullivan/Getty Images / Getty Images)

Over the last three years, California lost 11 Fortune 1,000 companies, whose exits are expected to negatively affect the state’s economy. 

The authors say the growing exodus comes down to economics, “plain and simple,” noting that state and local policies have raised business costs that are unmanageable. Consequently, businesses are choosing to move their headquarters to states with more favorable climates such as lower taxes and lower living costs. 

The exodus, according to the report, is happening across many industries, including manufacturing, aerospace, financial services, real estate, chemicals, health care, and high-technology businesses. 

WEALTHY CALIFORNIANS COULD FACE BILLIONS IN NEW TAXES AFTER MIDTERM ELECTIONS

Big-tech legacy firms like Hewlett-Packard Enterprises, Oracle, and Tesla command the most media attention when they leave California. But the state, the report notes, is also losing smaller businesses which spells negative implications for California’s economic future. 

Texas remains a major destination for businesses leaving California. But businesses are also moving to other states with lower business costs and better business climates than California, according to the report. 

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“Policies have driven business and housing costs so high that companies and people are leaving the state for more affordable, less regulated, and less taxed locations,” the report says. “This process will continue until the state’s political leaders make very different policy choices that create a different future for California—one that honors its remarkable past.”