Nation’s Sixth Largest Company Moving Corporate HQ from California to Texas

leaving-californiaMcKesson Corp., the nation’s largest pharmaceutical distributor, announced today that it will relocate its headquarters from San Francisco to Irving in April.

The company, which delivers prescription drugs and medical supplies, has more than 75,000 employees globally and had revenue of $208 billion last year. It ranks sixth on the Fortune 500 list, behind only Walmart, Exxon Mobil, Berkshire Hathaway, Apple and UnitedHealth Group.

With its move, McKesson will become the second-largest company by revenue to be based in North Texas, surpassing AT&T Inc. The largest, Exxon Mobil, is also headquartered in Irving.

Dallas-Fort Worth had 22 Fortune 500 company headquarters this year. That’ll grow next year with the addition of McKesson and another California transplant, San Francisco-based Core-Mark Holding Co., which is relocating to Westlake. …

Click here to read the full article from the Dallas News

Second-Largest CA Firm May Be Heading To Texas

welcome to Texas 2California could be on the brink of one of its biggest corporate defections yet with the signs that McKesson Corp. – the pharmaceutical giant that is sixth on the Fortune 500 list – is preparing to move its headquarters from San Francisco to the Dallas area.

Apple is the only California company that’s bigger than McKesson, which has 75,000-plus employees and had $198 billion in annual revenue last fiscal year.

McKesson saw its profile increase greatly in 2017 after a joint investigation by the Washington Post and CBS “60 Minutes”alleged that the company had played a central role in the national opioid epidemic by failing to report “suspicious orders involving millions of highly addictive painkillers.” Yet it’s long been considered one of the 10 biggest companies “you’ve never heard of” by the InvestorPlace website and other business trackers.

Firm sold San Francisco headquarters

Now, according to a connect-the-dots report by the San Francisco Business Times, its days in the Golden State may be numbered. McKesson officially denied it was looking to move. But the newspaper noted a number of seemingly linked developments:

  • The remarks of an official with Irving Economic Development Partnership that hinted McKesson was considering an expansion of its already “major commitment” to Irving. McKesson’s $157 million regional headquarters opened in 2016 in the business-friendly suburb of Dallas that already has the headquarters of such corporate giants as ExxonMobil, Fluor Corp and Kimberly-Clark. The state of Texas provided $9.75 million in subsidies to encourage McKesson’s decision.
  • The announcement that CEO John Hammergren will retire on March 31, 2019, and be succeeded by McKesson executive Brian Tyler, who lives in Las Colinas, a posh Irving neighborhood. His possible relocation was not directly addressed.
  • McKesson’s 2017 decision to sell its San Francisco headquarters for more than $300 million in favor of an arrangement in which it leased offices at the facility.

Given how much cheaper it usually is for a company to own rather than lease a large headquarters, the sale looks in retrospect like a warning sign to city leaders that their richest company was preparing to move.

McKesson would be hardest hit by new ‘homeless tax’

Nonetheless, besides Mayor London Breed, the city’s political establishment offered relatively little pushback to a successful tax measure on San Francisco’s Nov. 6 ballot that will take its single biggest toll on McKesson – at least if the company stays in the city.

To fund increased programs for the homeless, Measure C imposes a gross receipts tax on San Francisco-based companies which have $50 million or more in annual revenue. With $198 billion in fiscal 2017, McKesson is by far the highest-grossing San Francisco-based firm. Measure C is expected to generate $300 million a year, boosting the $380 million that City Hall now spends on homelessness.

If McKesson does leave, it will join the more than 1,700 companies whose decisions to abandon the Golden State have been documented since 2008. The traditional corporate complaints about California having high taxes and heavy regulations have been expanded in recent years to include concerns about the high cost of housing making it difficult to attract and retain workers.

Among the most prominent departures: Toyota moved its U.S. headquarters from Torrance to the Dallas suburb of Plano; energy giant Occidental Petroleum moved its headquarters from Los Angeles to Houston; and the Nestle USA food conglomerate moved its headquarters from Glendale to Rosslyn, Virginia, in the Washington suburbs.

This article was originally published by CalWatchdog.com

Did California save Ted Cruz?

ap_ted-cruz_ap-photo-3-640x426Chuck DeVore is just one of thousands of former Californians who have moved to Texas. But DeVore is unique. Not only did he serve in the California Assembly, but he remains heavily engaged in policy issues as Vice President of National Initiatives at the Texas Public Policy Foundation, a free market think tank based in Austin.

DeVore is a frequent guest on national television shows to speak on economic issues, including how progressive policies suppress economic growth. Moreover, he has firsthand experience with the movement of people and money between the two economic titans, California and Texas.

The migration of businesses from California to Texas is well-documented. Big names, like Charles Schwab, Campbell’s Soup, Burger King, Waste Management and other billion-dollar businesses severed their California connections for Lone Star liberty. In fact, it was entertaining to watch the sparring between then-Texas Governor Rick Perry — who frequented California to poach businesses from California — and the Golden State’s own Jerry Brown who tried to portray Texas as hick-country governed by a buffoon.

More than just businesses, it is people who have left California in numbers significantly larger than those coming in from other states. From 2007 to 2016, California has experienced net domestic out-migration of a million citizens, and the number-one destination? You guessed it. Texas. Of course, that doesn’t mean that California has lost population, in fact it has gained. But those gains have come from immigration – both documented and otherwise — and new births.

To read the entire column, please click here.

Say it ain’t so: Is Texas turning into California?

Laffer1When economist James Gaines gave a talk recently about the economy and the real estate market, his biggest audience response came from an unexpected topic.

Gaines, chief economist at the Real Estate Center at Texas A&M University, told hundreds of local real estate agents what to expect in the years ahead regarding the state’s population growth and demographic changes.

“Do you know what Texas looks like in 30 years?” Gaines asked the audience.

“California,” he offered as the whole ballroom of folks groaned and rolled their eyes.

Nothing gets a bunch of Texans more riled up than to tell them they are turning into California.

“I have used that line a number of times and get the same reaction,” Gaines said. “People are always asking where are we going and what will we look like.

“I’m serious about it,” he said. “The problems, the issues, politically, socially, economically, land use, housing resources — go down and tick off the issues. We are going down the same path.”

Gaines said the rapid growth of jobs, population and wealth that California has seen over the past few decades is similar to what Texas is now experiencing. That means the state faces the same opportunities and increasing challenges. …

Click here to read the full article from the Dallas News

Californians fed up with housing costs and taxes are fleeing state in big numbers

Californians may still love the beautiful weather and beaches, but more and more they are fed up with the high housing costs and taxes and deciding to flee to lower-cost states such as NevadaArizona and Texas.

“There’s nowhere in the United States that you can find better weather than here,” said Dave Senser, who lives on a fixed income near San Luis Obispo, California, and now plans to move to Las Vegas. “Rents here are crazy, if you can find a place, and they’re going to tax us to death. That’s what it feels like. At least in Nevada they don’t have a state income tax. And every little bit helps.”

Senser, 65, who previously lived in the east San Francisco Bay region, said housing costs and gas prices are “significantly lower in Las Vegas. The government in the state of California isn’t helping people like myself. That’s why people are running out of this state now.”

Based on the U.S. Census Bureau’s American Community Survey data, “lower income Californians are the ones who are leaving, not higher income,” said Christopher Thornberg, founding partner of research and consulting firm Beacon Economics in Los Angeles. …

Click here to read the full article from CNBC

Appeals Court Upholds Texas Ban On Sanctuary Cities

A federal appeals court Tuesday upheld the bulk of Texas’ crackdown on “sanctuary cities” in a victory for the Trump administration as part of its aggressive fight against measures seen as protecting immigrants who are in the U.S. illegally.

The ruling by a three-judge panel of the 5th U.S. Circuit Court of Appeals in New Orleans allows Texas to enforce what critics call the toughest state-level immigration measure since Arizona passed what critics called a “Show Me Your Papers” law in 2010.

The law allows police officers to ask people during routine stops whether they’re in the U.S. legally and threatens sheriffs with jail time for not cooperating with federal immigration authorities.

The ruling comes a week after the U.S. Justice Department — which had joined Texas in defending the law known as Senate Bill 4 — sued California over state laws aimed at protecting immigrants.

“Dangerous criminals shouldn’t be allowed back into our communities to possibly commit more crimes,” Republican Texas Attorney General Ken Paxton said in response to the decision. …

Click here to read the full article from CBS

Texas governor signs ban on so-called ‘sanctuary cities’

As reported by the Associated Press:

AUSTIN, Texas — Texas Gov. Greg Abbott on Sunday night signed what he calls a ban on so-called “sanctuary cities” that allows police to ask about a person’s immigration status and threatens sheriffs with jail if they don’t cooperate with federal authorities. He did so over intense opposition from immigrant-rights groups and Democrats, who say the law echoes Arizona’s immigration crackdown in 2010 that prompted national controversy and lawsuits.

Abbott, a Republican in his first term, took the unusual step of signing the bill on Facebook with no public notice in advance. He said Texas residents expect lawmakers to “keep us safe” and said similar laws have already been tested in federal court, where opponents have said the bill likely will be immediately challenged.

“Let’s face it, the reason why so many people come to America is because we are a nation of laws and Texas is doing its part to keep it that way,” Abbott said. His spokesman, John Wittman, later said they chose to sign the bill on a Facebook livestream because that’s “where most people are getting their news nowadays.”

The bill cleared a final hurdle this week in the Republican-controlled Legislature over objections from Democrats and immigrant rights supporters who’ve packed the Texas Capitol. They call it a “show-me-your-papers” measure that will be used to discriminate against Latinos. …

Click here to read the full article

 

New Overtime Rules Burden CA Small Businesses

Money

The Department of Labor’s new overtime rules come at a jarring time for California businesses which have seen recent changes in California laws to increase both the minimum wage and mandated leave. Small business employers can’t catch a breath before a new mandate comes down affecting their employees and ultimately their bottom line.

The Department of Labor’s new rule allows workers earning $47,476 annually time-an-a-half for every hour they work beyond 40 hours. The previous annual salary threshold for requiring time-an-a-half pay was $23,660.

National Federation of Independent Business California State Executive Director Tom Scott said in a release responding to the new rule, “We see this as particularly troubling here in California where the cost of doing business is already prohibitively high. Small businesses are still grappling with the news of a $15 minimum wage; now they have to go through each salary exempt position and decide which employees they have to shift to hourly workers. This will adversely affect workplace morale as many will view this adjustment as a demotion.”

However, there is a way for employees of all stripes to get a pay increase without affecting a businesses bottom line. Unfortunately, because of the increased burdens California businesses face more businesses are looking at this benefit for their employees: Move to a state with no income tax.

If an employee receives the same wage in, say, Texas or Nevada, which have no income taxes, more money stays in the employees’ pocket. It’s like a pay raise without the companies increasing payroll.

Too many California businesses are doing the math because of the constant attack on their bottom line.

Originally published by Fox and Hounds Daily

Will The Supreme Court Remake California Politics?

Photo courtesy Envios, flickr

Photo courtesy Envios, flickr

Like a bolt out of the blue the US Supreme Court has suddenly thrust front and center the most important question in a democracy: who should exercise political power.  Should it be all the people, or should it just be those citizens qualified to vote?  The Supreme Court has agreed to hear a case out of Texas that challenges the 50-year methodology of using all the people in drawing legislative districts.  The ruling could drop on California politics like a brick on a tea cup.

Beginning in 1962, the Supreme Court under Chief Justice Earl Warren handed down a series of rulings that said legislative and congressional districts must be drawn on the basis of equal populations – one person, one vote.  This did away with the old rural-based state senates, including California’s where three small counties had one senator and Los Angeles had one senator.  “Legislators represent people, not trees or acres,” said Warren in explaining why malapportioned districts were unconstitutional.

But the Supreme Court never said who the people were.  The Texas plaintiffs say representation should be limited to just the “citizen voting age population” (CVAP).  They have sued their state claiming that some districts have more voters than other districts, because in some districts almost everyone is a citizen while in others many residents are non-citizens, and thus non-voters.  This violates “one person-one vote,” plaintiffs say

So the issue will be: should districts be drawn on the basis of the voters and potential voters in a state; the over-18 citizen population; or can they be drawn as they are now on the basis of the whole population with citizens and non-citizens counted equally.

While this sounds technical and boring, it has huge political impact.  If California went from all residents in drawing its districts to just CVAP, central Los Angeles with its large non-citizen population and younger population would lose a significant number of districts; they would be shifted to the suburbs and rural California, areas with fewer children and non-citizens.

The Los Angeles State Senate district of Democratic President Pro Tem Kevin de Leon is 67 percent Latino by population, but only 52 percent Latino in CVAP.  So if it were redrawn based on CVAP, the district would need to increase in size thus pressuring neighboring Latino districts and ultimately leading to fewer Latino districts in Los Angeles as districts shifted to higher citizen population areas.

Theoretically at least, Republicans could be winners in this new scheme as their areas tend to be suburban and rural with more citizens.  Latinos and the inner cities would lose out, which is why Latino and liberal groups are already panicking over what the Court might do.  “It would devastate Latinos and Asians and the districts currently held by Latinos, Asians and African Americans in California,” said one redistricting expert.  “The question is whether the cities should enjoy the same per capita representation as their suburban and rural, whiter, older counterparts,” wrote one unhappy academic.

Unfortunately for those on the academic left, the answer might be yes.  The Warren Court rulings said we must equalize the rights of voters to elect their representatives.  But if you have some districts full of non-voters, are you not discriminating against those neighboring districts with lots of voters?

The Warren Court did not face this issue half a century ago because the census did not provide a way to count only citizens.  But now the US Census provide counts of those over and under the age of 18, and the census itself has developed a methodology to determine CVAP in census units.  Meridian Pacific has published an analysis of all the districts drawn by the Citizens Redistricting Commission in 2011 and also provides CVAP for every California district.

The Supreme Court itself seems somewhat enamored by CVAP.  In a 2009 case called Bartlett v Strickland the Court ruled five to four that in drawing minority districts a minority group must constitute a numerical majority of the voting-age population in an area.  This required the Citizens Commission to consider CVAP in drawing most of the Los Angeles districts because of the size of the minority populations, so CVAP has already been used in one instance in California.

My guess is that four of the five justices who made up the majority in that ruling voted to hear the Texas case, and that there are five justices ready to define the Warren-era “one person-one vote” standard to mean those who actually can vote: citizens over the age of 18.

If they do, California might have to completely redistrict before the 2018 election, and that would vastly increase the number of rural and suburban districts in this state.

Originally published by Fox and Hounds Daily

Texas Now Produces More Natural Gas Than All Of OPEC

Everything is bigger in Texas, especially natural gas production. The Lone Star State alone produces more natural gas than every country in the world, except Russia, and that includes every member state of OPEC.

The American Petroleum Institute has released a graphic showing that Texas produces 18.81 billion cubic feet of natural gas per day, well above any member of OPEC. The graphic is meant to show how hydraulic fracturing and horizontal drilling into shale formations has made the U.S. the world’s top oil and gas producer.

Source: The American Petroleum Institute
Source: The American Petroleum Institute

“This is what energy security looks like,” Tracee Bentley, head of the Colorado Petroleum Council, said of the graphic. “Thanks to innovations in hydraulic fracturing and horizontal drilling, Colorado now outpaces seven of 12 OPEC nations in natural gas production.”

Individual U.S. states now produce so much natural gas, they outrank whole countries when it comes to daily production. Iran, the largest OPEC gas producer, only produces 15.43 billion cubic feet of natural gas per day. Qatar, OPEC’s number two gas producer, produces 15.09 billion barrels per day.

Louisiana and Pennsylvania also rank among the world’s top 15 natural gas producers. Louisiana produces more gas major producing countries like the Netherlands and Indonesia, while Pennsylvania beats out Mexico and the United Arab Emirates.

Russia as a whole still produces more natural gas than any individual state, but the U.S. as a whole produces much more than Russia. Total U.S. natural gas production comes in at 65.73 billion cubic feet per day, compared to Russia’s 59.46 billion cubic feet per day.

“Rising domestic production has helped to reshape global markets and revitalize job creation here in the United States,” Bentley said.

API’s graphic also compares individual states against the world when it comes to oil production. On its own, Texas produces more crude oil per day than the UAE, Kuwait, Venezuela and Nigeria. As a whole, the U.S. is the world’s largest producer of oil.

Source: The American Petroleum Institute
Source: The American Petroleum Institute

Follow Michael on Twitter and Facebook

Originally published by the Daily Caller News Foundation