What’s Reshaping Arizona, New York City And Texas?
CNBC・2 minutes read
Arizona is becoming a popular destination for companies and residents due to its lower cost of living, business-friendly environment, and focus on industries like electric vehicles and semiconductors. Texas is also attracting individuals and businesses from California with its lower taxes, cost of living, and business-friendly regulations, making it an appealing alternative for those looking to relocate.
Insights
- Arizona's strategic location, business-friendly environment, and significant investments in electric vehicles, self-driving technology, and semiconductor manufacturing have positioned it as a key player in these industries, attracting major companies and fostering innovation.
- Texas' appeal lies in its lower cost of living, business-friendly policies, and lack of income tax, making it an attractive destination for both individuals and companies looking to relocate from states like California, with a robust economy, rich history in tech, and renowned educational institutions further enhancing its allure.
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Recent questions
Why are companies relocating to Arizona?
Due to lower cost of living and business-friendly environment.
What makes Arizona a hub for electric vehicles?
Proximity to Mexico, EV supply chain, and major investments.
How does Arizona manage its water resources?
Through groundwater access, on-site recycling, and conservation efforts.
Why is Texas attractive to businesses and individuals?
Lower cost of living, business-friendly environment, and lack of income tax.
What are the challenges Texas faces?
Extreme weather conditions, population boom, and vulnerability to disasters.
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Summary
00:00
Arizona: Hub for Tech and Manufacturing Growth
- The cost of living in San Francisco is three times that of Arizona, leading to an influx of people relocating to Arizona and working remotely.
- Arizona is rapidly becoming a hub for electric vehicles, self-driving technology, and semiconductor manufacturing.
- Arizona is considered the semiconductor capital of the world, with major investments from companies like Intel and Taiwan Semiconductor.
- Phoenix attracted more residents than any other US city in 2020, with 634 companies relocating or expanding in Arizona between 2015 and 2020.
- Arizona's history of manufacturing and business-friendly environment has attracted companies like Apple, Caterpillar, and Infosys.
- Arizona's proximity to Mexico and access to the EV supply chain has been a significant factor in attracting companies like Lucid Motors and Nikola.
- Arizona offers ideal testing conditions for vehicles, with six major test tracks and proving grounds for car companies to discreetly test their cars.
- Arizona is a key player in the development of self-driving technology, with companies like Waymo, Uber, and Cruise testing autonomous vehicles in the state.
- Intel's significant investment in Arizona, with plans for two new factories, will make it the company's largest manufacturing site globally by 2023.
- Arizona is considered one of the top states in the country for semiconductor talent concentration, further solidifying its position in the industry.
13:07
Arizona's Water Management and Industry Sustainability
- Making chips requires an immense amount of water, with a typical fab using 2 to 4 million gallons daily.
- Arizona's main water source is groundwater accessed through wells, but excessive use is depleting it faster than it replenishes naturally.
- Some manufacturers have implemented on-site water recycling, reclaiming over 80 to 90% of water used.
- Intel treats 9 million gallons of water daily, returning much to the local supply for irrigation.
- Arizona has a history of reusing grey water for cooling and irrigation, storing water in underground aquifers, and limiting urban irrigation.
- Arizona uses less water now than in 1957 despite a six-fold population increase, focusing on water management.
- Major canals and tributaries allow 36% of Arizona's water to come from the Colorado River.
- Lucid recycles water used in making Air vehicles through a treatment system.
- Arizona ranks second in reliable power grade, with energy costs half of California's industry rates.
- Arizona's population has grown steadily, with a 13.9% increase from 2010 to 2019, providing a skilled workforce for companies relocating from California.
25:36
New York's Fiscal Outlook: Surplus to Deficit
- Fiscal year 2021 projected a surplus of nearly $3.4 billion from income and corporate taxes.
- Medium-term outlook anticipates a $15.6 billion deficit for fiscal years 2022 through 2024 due to property tax decline.
- Governor Cuomo estimates a $15 billion deficit for fiscal year 2022.
- Policymakers advised not to overreact to the current revenue shortfall, as it's manageable.
- President Biden's American Rescue Plan includes nearly $24 billion for New York, with $6 billion allocated to the city.
- Wealthiest individuals in the city and state saw an $88 billion increase, highlighting the failure to tax them adequately.
- New York City's high municipal income tax is a challenge, especially as people move away during Covid.
- Property tax slump led to revenue loss, prompting the city to consider raising rates or targeting higher taxes.
- Fear of high-income earners leaving due to high taxes is common, but data shows only a small fraction move for tax purposes.
- New York City's history of downturns and recoveries showcases resilience, with the current pandemic posing unique challenges.
38:00
Texas: Business Hub with No Income Tax
- Texas and California are the two most populous states in the US, with Texas attracting wealthy individuals due to its lack of income tax.
- Texas is the ninth largest economy globally and a major business hub, ranking second in CNBC's top states for business.
- Texas boasts a significant manufacturing sector in Central Texas and is a major player in oil and energy, being the country's top exporter for 18 years.
- Texas is home to 50 Fortune 500 headquarters, over 1600 foreign-owned companies, and 2.7 million small businesses, with a large workforce.
- Texas has renowned educational institutions like the University of Texas System and Texas A&M, attracting many companies to the state.
- Texas was the second most popular destination for people leaving the Bay Area during the pandemic due to its lower cost of living.
- Texas has a rich history in tech, with companies like Texas Instruments, Dell, IBM, and Microsoft having a significant presence in the state.
- Austin is becoming a tech hub with companies like Apple, Tesla, and Oracle establishing a presence, prompting comparisons to Silicon Valley.
- Texas offers a more hands-off approach to regulations and taxes compared to California, making it attractive for businesses and individuals.
- Texas has a lower cost of living and business-friendly environment compared to California, making it a more affordable and attractive place to live and work.
49:25
Tax and Climate Contrasts: California vs. Texas
- Moving from California to Texas resulted in a decrease in property tax from 1.25% to 1.7% and the elimination of income tax, making it a net gain in terms of taxes.
- In Texas, there is a uniform property tax for everyone, unlike California where there can be significant disparities, especially burdening younger people and newcomers.
- The high cost of utilities in Texas, like a $12,000 connection fee for water, can be surprising for those moving from other states.
- While housing is cheaper in Texas compared to California, the Texas housing market is experiencing a population boom, leading to increased home sales and low inventory.
- Texas faces challenges like extreme heat, humidity, droughts, wildfires, and hurricanes, with recent disasters causing significant damage and loss of life, highlighting the state's vulnerability and political dynamics.
