Jun 30, 2022 - News

Out-of-state Democrats try to lure back Texas businesses

Illustration of a blue donkey holding an arrow in its mouth
Illustration: Sarah Grillo/Axios

In light of the overturning of Roe — and with the prospect of other red-state restrictions on marriage — Democrats are trying to win back businesses that have fled to lower-tax, lower-regulation havens like Texas.

What they're saying: "Some of you may have left the state; come on back," California Gov. Gavin Newsom said Friday, after the Supreme Court ruling. He continued: "It's a point of pride that we welcome you back, we want to celebrate that we have you back."

  • New Jersey Gov. Phil Murphy wrote to businesses in Texas and other states after the leaked draft of the decision to overturn Roe, saying the ruling would have a "chilling effect" on "your ability attract and retain top female talent."

Flashback: After Texas passed a law last year effectively banning abortion after six weeks of pregnancy, Connecticut Gov. Ned Lamont made this plea to Texas companies, per reporting by Politico: "We don't have oil and natural gas, but we have one of the most productive, best trained, most innovative workforces in the world. And that starts with the fact that we have more women participating in our workforce than just about anywhere else."

Reality check: It's a lot cheaper for Texas-based companies to pay for out-of-state abortions than to reestablish their brick-and-mortar headquarters in far-away states.

  • Plus: The reason many of them relocated to Texas in the first place was because of low regulations and taxes — as well as big talent pools and easy logistics.
  • And Texas' socially conservative policies are not new.

The bottom line: "Not going to happen," corporate location adviser Dennis Donovan, of WDG Consulting, tells Axios, of the prospect of Texas companies picking up for blue states because of abortion restrictions.

  • But, he said, public-facing businesses and technology companies will think twice about relocating to Texas and other red states for fear of blowback from employees and customers.

What we're watching: Some GOP lawmakers have pledged to file legislation barring companies from doing business in Texas if they choose to pay for abortions.

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