By allowing ads to appear on this site, you support the local businesses who, in turn, support great journalism.
California keeping business hostage in bureaucracy hell
Christopher Rufo
Christopher Rufo is an American conservative activist and senior fellow at the Manhattan Institute.

I was born in Sacramento in the 1980s. On long car trips to visit relatives in Palm Desert, my family would sometimes stop to see the tar pits in Los Angeles known as La Brea. I remember silently taking in the re-creations of prehistoric mammals — mammoths, wolves, bison, lions, saber-toothed cats — trapped in the bubbling Gilsonite muck, with no hope of escape.

Recently, I have had the same feeling: stuck, suffocated, and suspended in time. My predicament is not caused by the natural world, however, but by the deliberate human morass of California’s state government.

Nine years ago, I left my native state and moved to the Pacific Northwest, but I’ve not been able to shake off my entanglement with the bureaucracy in Sacramento. At the time, I was running a nonprofit film studio, Documentary Foundation, and sought to re-domicile the corporation to Washington State. But my lawyer gave me bad news: nonprofit corporations cannot easily leave the Golden State. He recommended maintaining the California corporation and opening a related corporate entity in Washington.

For seven years, my lawyer and accountant prepared two sets of statements, reports, compliance documents and tax filings: one for California, one for Washington.

After years of this bureaucratic two-step, I decided finally to sever ties with California. I founded a new nonprofit corporation in Washington State and filed for dissolution of the old nonprofit in California.

That’s when the real trouble began. I have spent the past 18 months writing, calling, filing, submitting, signing, notarizing, petitioning and mailing information to the California Secretary of State, the California Attorney General, and others — all in the hope of closing down a single corporation.

Filings are accepted, rejected, or forwarded to another department. Letters assure me that the process is almost finished, but then other letters come with new regulations and requirements. A recorded message instructs me to leave a voice mail; nobody calls back.

The message from California is unmistakable: no exit.

What could the reasons for this be? First, garden-variety bureaucratic incompetence. California is a vast state with a sprawling, insulated public sector. My mother spent her career working as an attorney for the state and concluded, after decades of service, that the agencies actively undermined their stated missions and harmed the quality of life for residents.

A second reason is greed. As many upwardly mobile residents flee the state because of exorbitant costs, high taxes and urban dysfunction, California has sought to entrap them in a bureaucratic net. State lawmakers even proposed an “exit tax,” in which former California residents must pay taxes for 10 years after moving out of state. The bill failed but will likely surface again.

The motivation is punitive. La Brea captured, dissolved, and fossilized the megafauna of the past with the cruel disinterest of nature. But with the state bureaucracy, a human hand reaches, tangles and restricts.

On its own, my predicament is somewhat trivial: a few years caught in paperwork hell. But it is symbolic of a larger problem that, multiplied by millions of residents, businesses, and ventures, becomes significant.

My family settled in California — my father from Italy, my mother from Detroit — because their birthplaces offered little opportunity. But what happens when a Golden State becomes an iron cage? Can it be revived? If not, where can people go instead? And will the state, with an outstretched hand, follow them into the future?

The current leadership of California has secured its rule, resembling the one-party states of Latin America more than the competitive democracies to the north. State legislators are rapidly drawing down their inheritance and squandering the productive capacity of the past. They extract, capture, and compel, but they create nothing.

As long as California’s leaders can conjure up scapegoats — billionaires, tech firms, oil companies — the state will keep enough of the population in limbo to meet its needs and forestall the long-term consequences of its policies. Eventually, however, there will be a reckoning.

My hope is to complete my exit before it comes.

Christopher Rufo is an American conservative activist and senior fellow at the Manhattan Institute.