Moving to Idaho from California
Hey everybody, Treasure Valley Dave here in Nampa, Idaho! People leaving California and moving to Idaho have been a hot topic for a while now, and I wanted to talk about why that is happening. The reason people are leaving California may be evident to you, but it might not be to others. Either way, you will find the information here worth your time, so let’s jump right in!
Why Are People Leaving California?
It’s no secret that citizens of the Golden State are packing their bags and calling it quits. CNBC Reports that 360,000 people left California in 2021 because of the availability of remote work and cheaper housing. While that may be true, not one of the dozens of clients we have helped during that period cited “remote work in Idaho” as a motivation for them to leave California.
Here’s a short list of the most common reasons people have left California and moved to Idaho.
- Politics
- Taxes
- Cost of Living
- Crime
Politics
California has been a “Blue” state since 1992. The disparity between Red Voters and Blue Voters became even more significant in the 2008 election when Obama was elected President of the United States, and it hasn’t changed much since.
While California may not be a “conservative” state, the citizens have still voiced some concerns regarding some of the state’s policies, according to PPIC.org:
- Most Californians, from coast to interior, feel their taxes are too high, and Californians almost everywhere believe immigrants benefit the state.
- Concern about the cost of housing shows sharp divides between the coast and the interior, though Californians are concerned in most parts of the state.
- Support for the Affordable Care Act (Obamacare) is lukewarm in most places.
You can watch Dave Edwards cover some of the politics in California below if you like.
Most recently, with the November 2022 Elections, little has changed. If there has been a change, the state leadership leans even more left now that the election is over than it did before.
Here is the political leadership as the state sits right now:
The state is led by a Democratic Governor, Gavin Newsom. Alex Padilla, a Democrat, represents the state in Washington, DC. The state’s senate has 21 Democrats and 6 Republicans, and the assembly has 27 Democrats and 8 Republicans.
You can see that Democrats overwhelmingly run the state, and it appears that won’t change anytime soon.
Taxes
Another commonly cited reason for leaving California is heavy taxation. Using Gusto.com’s Hourly Paycheck Calculator, calculate how much money someone will take home while living in California.
Gusto.com
I said I was making $25 an hour, getting paid every two weeks, and was married.
Income taxes were calculated at 9.71%, and FICA taxes were calculated at 7.65%. After taxes, my take-home pay was $1,652.72.
It gets more complex when you examine the taxes a business must pay. We recommend this breakdown by LegalZoom to understand it all. But what we found interesting was how California’s government found a way to tax business owners of LLCs not just once but twice yearly.
If an LLC has a net taxable income, it can elect to pay the Corporate Tax, which is 8.84% of its annual earnings. If an LLC does not have a net taxable income, it must pay the Corporate Alternative Minimum Tax (6.65%). Regardless of how the LLC files above, all LLCs must pay a franchise tax of $800 or 1.5% of their net income, whichever is larger.
At a glance, the taxes may not seem so bad. You make $2,000 every two weeks and take home $1,652. That’s not terrible; that’s $3,338 a month. Here’s the thing, though. We haven’t even gotten into the cost of living yet, which is what we’re about to do now.
Cost of Living
Beautiful beaches, scenic mountains, endless deserts, bold mountains, and towering redwoods… California does have it all. But you’re going to pay for it.
Under the taxes section that we calculated, if you made $4,000 a month, you would take home around $3,338.71 after taxes. Now, what about all of our living expenses? How much do those cost?
Well, they cost enough to make people leave the state. So let’s do some research and let’s find out.
Accommodation
You have to have somewhere to live, so let’s start with that. For example, let’s say you live in Sacramento, California, within your means and have a one-bedroom apartment.
We found a cheap apartment for $1,695, so let’s deduct that from our $3,338.71. Our remaining funds after paying rent are $1,653.71. Now, let’s pay our utilities.
Utilities
We did a Google search to determine how much the average monthly power bill is. However, we hear that this number is much higher than reported here:
“In Sacramento, CA, the average monthly electric bill for residential consumers is $164/month, which is calculated by multiplying the average monthly consumption by the average electric rate: 876 kWh * 19 ¢/kWh”.- EnergySage.
Water, Sewer, and Trash
This Redditor in Sacramento said, “Our 2 Bedroom house is $170 a month. The variables you can control are the size of your trash cans and the amount of water you use (we haven’t switched over to a meter yet, so it’s based on # of rooms). The rest are fixed costs (sewer & stormwater, street sweeping). With smaller trash cans and reasonable water usage, you should be below $150”.
Now, after deducting our utilities, we are left with $1,319.71.
Food
The Bureau of Economic Analysis estimates that in California, the average person spends $302.50 on food monthly. Remember, I said I was married, so I am feeding at least two people, so we need to multiply that by 2, which ends at $605.
We are left with $714.71.
Car Utilities
Now, I drive to work, so I must factor in gas, car insurance, and registration. Financebuzz.com states that California residents spend 3.72% of their annual income on gas yearly. So before taxes, we made $48,000 each year.
3.72% of $48,000 = $1,785.60 (annually)
We then need to divide this number by 12 to get the average amount spent on fuel. $1,785.60/12= $148.80, which we then deduct from our remaining $714.71 budget.
We are now left with $565.91.
Then, we need to pay for our registration for the year. I don’t live in California, so I wasn’t sure how much registration would be. So this was how much it cost me to register my new vehicle online: $521.00.
Now, I need to deduct my registration fee of $521.00 from my budget.
$565.91 – $521.00 = $44.91
To drive legally and safely on the roads, I need to make sure that I have car insurance. This annual car insurance calculator estimated that the lowest I would pay with Progressive would be $596. So let’s get that into monthly costs.
$596/12= $49.60
That leaves us at a balance of -$4.69.
What Now?
We haven’t even added our cell phone bill yet, paid our health insurance, budgeted for anything fun, or even set aside anything for savings.
At the beginning of our Cost of Living assessment, I said I was making $25 an hour and filing married. At this point, I either need to find a higher-paying job, which may or may not happen, or my wife will need to go to work. Hopefully, we don’t have kids soon because that would also be an added cost!
If you’re living in So-Cal and commute to work, you can attest to the amount of money that comes out of your paycheck just in tolls alone! So before you move on to reading about crime in California, leave a comment below telling me how much you pay in toll fees!
Crime
Another common thing people express after visiting Idaho is how safe they feel even walking in the heart of Boise. Pulling once more from PPIC.org, here are some data on crime in California:
- California’s violent crime rate increased by 6.0%, from 440 per 100,000 residents in 2020 to 466 in 2021. While robberies fell somewhat (by 1.9%), aggravated assaults jumped by 8.9%, and homicides and rape increased by 7.7% and 7.9%, respectively.
- In 2021, aggravated assaults were 67% of reported violent crimes; 24% were robberies, 8% were rape, and 1% were homicides.
- California’s violent crime rate in 2020 (the latest nationwide statistics available) was higher than the national rate of 387 per 100,000 residents and ranked 16th nationwide.
Crime is a factor when it comes to people deciding if they want to stay or leave California, but it’s not like nothing is being done about it.
The state website, CDCR, reports, “As of September 14, 2022, the State’s adult prison population is 91,638, occupying 111.8 percent of design capacity”.
Meaning California’s state prisons are about 11.8% overcrowded.
More than just numbers, it boils down to how safe people feel, and our clients report feeling overwhelmingly safer in Idaho than in California.
Interestingly enough, it’s not just individuals seeking exodus from California. Businesses are leaving too.
Why Are Businesses Leaving California?
It probably doesn’t take much to conclude that businesses have left California for some of the reasons listed above. One of the main reasons is most likely the taxes. So remember that whole double-tax thing?
Well, let’s look into the business side of things some more. Here are how many businesses left California in the past four years:
2021: 153
2020: 75
2019: 78
2018: 46
We said it had a lot to do with taxes, which we still believe to be accurate, but look at that spike in departures from 2020 to 2021! Think back to what was happening in the world then, and you might discover a big reason businesses leave California.
We could detail the taxation of businesses again, but we wouldn’t want to bore you once more with that information. So let’s jump into some of the crimes in the Golden State.
Crime
Penal Code 459.5: Shoplifting is stealing items valued at under $950 and is a misdemeanor crime. Shoplifting is always a misdemeanor crime and is punishable by up to six months in county jail and a fine of up to $1,000 unless the defendant has one or more prior convictions.
If you want to risk stealing something and get the most bang for your buck, you could walk into a store, find something valued at $949.99 and walk out. You might get caught, but you might not. If you do, you only get a $1,000 fine. If you don’t, you get an item worth just $51 shy of $1,000.
Now, put yourself in the shoes of a store owner. There’s no possible way that you can catch every single theft. Instead, it would be best to have employees willing to care for your items as much as you are, or you need to hire security.
This has become a widespread problem for store owners, so much so that they had to make a new acronym: ORC.
CS News Reports: “During the economic crisis fueled by the COVID pandemic, ORC cost the US economy $125.7 billion in lost economic activity. It also cost federal and state governments roughly $15 billion in tax revenues, which should be used for infrastructure and public services”.
No wonder businesses were leaving the states that were harboring these thieves. The risk only lay with the store owner, the law-abiding citizen.
In other states, business owners could operate freely without the fear of a mob organizing a “hit” on their stores, and they could also pay their employees less due to a lower cost of living.
Employment Wages
As it stands, the current minimum wage in California is $15 an hour. In Idaho, it is $7.25 an hour. Now, let’s say you would start a successful business with several employees and knew you could operate in either state. Where would you go: Idaho or California?
The decision that would make the most financial sense for you is Idaho. Remember this is before shipping, management, product availability, overhead, etc. So we strictly look at how much you would have to pay your employees. Based on that alone, most businesses would move to Idaho instead of staying in California.
Very few businesses today can still pay $7.25 an hour and get anyone to work for them. Like in California, only a few companies can pay $15 an hour and remain attractive to job seekers. Inflation has had an impact on the job market.
Why Are Californians Moving to Idaho?
Only some people might have Idaho at the top of their list regarding a state that would draw people in. So, why do people even consider moving there? What is it about Idaho that brings people there?
Politics
Idaho has always been and hopefully always will be a red state. Recently, the Governor of Idaho, Brad Little, was re-elected in a landslide vote. He drew in 60.5% of voters, while his Democratic challenger only drew in 20.3%. So it doesn’t seem like Idaho will flip blue or purple soon.
Outside of how people vote, there are also specific laws and policies. For example, you don’t need a permit or license to conceal carry in Idaho. This is just something that people do here.
Another example is Grand Theft, which is the theft of anything over $1,000 leads to a felony charge, no more than $10,000, and 1-20 years in prison.
Idaho does things differently when it comes to politics. For example, the state doesn’t have soft-on-crime policies that we believe have made California go downhill as quickly as it has.
Taxes
From the Idaho Tax Commission, “Income tax rates for 2021 range from 1% to 6.5% on Idaho taxable income. Individual income tax is graduated. This means that Idaho taxes higher earnings at a higher rate”.
The most that your income will be taxed is 6.5%, and as a business owner, there’s no double taxing like you saw in California.
In Idaho, the sales tax is 6% as opposed to California, which is 7.25%.
Across the board, Idaho is just more tax-friendly. The only place that California beats out Idaho is in property taxes. California sits at 0.73%, Idaho’s statewide urban tax rate averages 1.511%, and the rural rate is 0.994%.
Cost of Living
Instead of writing out the cost of living for Idaho, we’ve researched for you in a video below.
Crime
We know we’ve mentioned this before (maybe more than once), but our clients love how safe Idaho is. But not just our clients have noticed how secure it is here. Even US News put Idaho in their Top 10 Safest Places to Live in the United States. So you can read the full 2021 Idaho Crime Report here.
Moving to Idaho: Pros and Cons
We wouldn’t be doing you, the reader, any favors if we didn’t just lay out some common pros and cons in a simple, bulleted list you can review.
Pros of Moving to Idaho
- Weather
- Interestingly, this one is also on our Cons list but is still a pro. In Idaho, you get four full seasons. You get to see the leaves turn, which is one if not our favorite parts of the year.
- Cost of Living
- Living in California is sometimes overbearing cost-wise. Idaho is much more resident-friendly.
- Less Crime
- There are only 9,000 incarcerated individuals. What does that tell you?
- Taxes
- Fewer taxes means more money in your pocket.
- Politics
- Not saying red is better, but it certainly makes life a little easier!
Cons of Moving to Idaho
- Weather
- As we said, this one is a pro and a con. The winter can be an adjustment, although it’s nothing like you’re probably imagining. We usually have a white Christmas, but we don’t get feet and feet of snow. It’s usually a light powder.
- Less Pay
- As we mentioned, you get paid less here in Idaho, but that just comes with the territory. Your cost of living is less.
- No Oceans
- For some, this is a considerable drawback. For others, it’s not a big deal. They made planes and trains for a reason!
- Politics
- Depending on how you align your views, there might be a better place for you than Idaho.
- Amusement Parks
- In Northern Idaho, there is a small amusement park but other than that, that’s about it! No Universal Studios or Disneyland here!
How to Plan Your Move to Idaho
We wrote a guide on 10 Things You Shouldn’t Do When Moving to Idaho From California, which we highly recommend downloading. But for things that you should do, here’s our list:
- Start a fact-finding trip.
- Know your wants and needs.
- Trust yourself.
- Create a budget and stick to it.
- Get rid of your junk.
- Prep your pet.
- Have health insurance.
- Get your car looked at.
- Don’t second-guess your decision.
- When you’re ready to move, DO IT!
We go over these ten things in more detail in the guide we mentioned earlier by covering what you shouldn’t do. If you stick to what we tell you, you’ll be fine!
Moving to Idaho Will Be the Best Move You Ever Made
Clients like working with us because we practice and have practiced what we preach. Each one of us has moved to Idaho from somewhere else. Dave, Mareen, Kelly, and Aaron moved from California, and Steven moved from Washington. We know that you will be happier in Idaho.
How Will You Know?
It all goes back to that fact-finding trip, doing some research, giving us a call, and letting us help you. We know that a better quality of life awaits you in Idaho, and we want to help you get it!
If you’re interested in learning more about Idaho, contact us. You can give us a call at 208-860-2004 or shoot us an email at info@treasurevalleydave.com. We’d love to help you start planning your move from California to Idaho today!
