There is a possibility of an economic downturn and critics say this is not hypothetical nor prophetic It is happening right now.
1. California residents are exiting the state because of high prices of homes commodities, gasoline and in general high cost of living. They are joining their companies now exiting the state; estimated number about 800,000.
2. High tech companies those in Fortune 500 have exited the company. Reason: high cost of regulation, fines, high cost of fuel, and not so friendly to business any more regulatory environmnet
3. Exit, transfer of high value individuals (billionaire) due to the yearly tax on wealth (subsequently repealed. The billionaires put up a fund to wage war vs the measure using political and legal means The Gov eventually folded up and ordered the repeal)
4. Regulatory over reach affecting:
1. Fuel supplies
1. Huge fines to refineries. Two refineries accounting for 16% of CA fuel supplies closed down due to huge fines that were imposed;
2. The shortfall is being replenished by imports from Asia: Korea, Singapare and India
resulting in higher prices due to freight cost, which takes a month from the port of
origin.
3. Fuel prices have skyrocketed as result surpassing the projected $8.43 per gallon.
4. This has affected fuel prices in Arizona and Nevada which buys fuel from California
refineries
2 Truckers moving out due to:
1. Order to convert to electric motors which cost 3x the diesel counterparts
2. Family owned trucking company ordered to have owners workers as employees
thus subjecting these family truckers to added cost
3. Gasoline stations shutting down due to an old order asking gasoline stations to convert
to double walled tanks which cost millions of dollars to retrofit; govt promised loans
but never came Beginning Jan 1, 2026, gasoline stations not complying and there are
estimated to be 400 of them, chose not to open because of $2,500 fine per day.
4 .Factories on emission and plastic packaging
Frito Lay a subsidiary of Pepsi Co chose to close its Frito Lay plant because of the risky
regulatory environment. A simple mistake in printing of its packaging could cost the co
millions. Thus costing the site of the factory loss primary jobs, secondary jobs and loss
of sale by potato farmers
The manufacturing sector is complaining with high cost of research as asked by the regulators
and huge fines
We should admire efforts by California to be a leader in clean environment, responsible
governance by business owners the regulatory over reach has resulted in loss of economic
activity and resources and tax base
Thus continued budget deficit by the state and weakening of the Gov campaign to unseat Trump.
California could lose its luster its premium position as land of wealth and innovation with these developments.
