What Texas offers, though, beyond the direct financial incentives, is a much more business-friendly and employee-friendly environment. Even people with modest salaries pay almost ten percent of their salaries in California income tax. In Texas, that rate will go to zero. In California, Proposition 65 requires warning signage for every fluid on site, with fines for failure to post — just one more burden on a company that builds and operates rocket-powered vehicles. When California’s idiotic new carbon trading law comes into effect this year, the company is going to have to start tracking every gallon of fuel it burns and report it to the state. No one in Texas will care.
The company isn’t abandoning California entirely. The company says that it should be thought of as an expansion, rather than a move. At a press conference on Monday, Chief Operating Officer Andrew Nelson said that they might even hire a few more people in Mojave. Operational flights will continue in Mojave (and likely at other spaceports in the future) — the location will still offer spectacular views from a hundred kilometers. But the center of gravity for research and development, including flight test, will move to Midland. It won’t happen immediately. The initial version of the company’s Lynx spaceplane will continue on in Mojave, both to avoid disruption of its schedule (they want to have initial flights by the end of the year) and because it will take a year or more for Midland Airport to get its own spaceport license from the FAA.
But the handwriting is on the wall. Rather than seeing significant growth in California, much of the company’s growth will be in Texas, and perhaps Florida, or other more business-friendly places, if it also moves into large-scale engine production in the future, as is rumored.
Could Mojave have competed with Midland’s offer? Cash-strapped California might credibly offer an excuse that it can’t afford to hand out the millions in financial incentives that Texas is, if it weren’t for the fact that they just approved the “high-speed” boondoggle that will cost the state’s taxpayers billions. But the real problem is the regulatory environment. Jeff Greason, XCOR’s CEO, warned Governor Brown’s envoy in April that “California can have either all the regulation or all the business, but it can’t have both.”
But to little avail:
[Mojave Air and Space Port Manager Stuart] Witt said that Knudsen told him he had no idea how much was happening in Mojave, and that he would report his findings back to the governor’s Cabinet. However, Knudsen warned that there’s only a limited amount the state can do given current fiscal and policy constraints, Witt added.
For “fiscal constraints” read “too many promises of pensions to prison guards and teachers, too many trains to nowhere, and too little revenue as we destroy the businesses that remain in the state.” For “policy constraints” read “irrational fantasies that by having our own carbon trading scheme we will somehow heal the planet.” And so, the once-visionary state that long ago nurtured the fledgling aerospace industry is apparently choosing to use taxpayer money to fund a nineteenth-century transportation solution doomed to failure, while chasing away an innovator of a twenty-first century transportation business that had been trying to revive it. And the gold continues to tarnish in the once-Golden State.