California Ranked Worst For Business, But It May Be On Its Way Up
A new survey of 650 business leaders conducted by Chief Executive magazine places adds insult to injury by placing California in last place as a place to do business for the eighth consecutive year in a row. The state of Texas maintained its position as the top-rated business location, followed by Florida, North Carolina, Tennessee, and Indiana.
“Each year, the evidence that businesses are leaving California or avoid locating there because of the high cost of doing business due to excessive state taxes and stringent regulations, grows.” the report said.
“According to Spectrum Locations Consultants, 254 California companies moved some or all of their work and jobs out of state in 2011, an increase of 26 percent over the previous year and five times as many as in 2009.”
”California regulations, taxes and costs will leave only tech, life sciences and entertainment as viable. If you aren’t an elitist, no room here for the middle or working classes,” commented one responding CEO.
California’s unemployment rate sits at 11%, the third-highest in the nation, according to state labor market records, and on its own supports 1/3 of the United States’ welfare recipients, the Chief Executive article said.
Late economic improvements and a drop in unemployment rates have spurred the expiration of long-term unemployment benefits in California, according to an article in the Los Angeles Times:
“Close to 100,000 jobless Californians will lose as many as 20 weeks of federal unemployment insurance benefits in three weeks, state officials warned. The extra benefits of as much as $450 a week are part of a federal extension to the regular state program known in bureaucratic parlance as FED-ED. But that assistance, the fifth such extension of benefits, is set to expire on after May 12 because of improvements in the Golden State's economy and a drop in the unemployment rate to 11% in March.”
At the annual Milken Institute Global Conference of economic experts and leaders, held from April 29 to May 2 in Beverly Hills, former California Governor Gray Davis was optimistic, saying in another article in the Times that the state is "finally moving in the right direction."
“Now, the state is trying to streamline the business start-up process and avoid unnecessary delays. That expediency should also be applied to other large infrastructure projects”
Robert Litan, vice president for research and policy at the Ewing Marion Kauffman Foundation in Kansas City, Missouri, said:
“While California is often criticized for having too many regulations, high taxes and a bad business climate, it is a hub of entrepreneurial activity. The state ranked second in the country in the formation of new businesses.”
Statistics gathered by the Milken Institute listed two Southern California metropolitan areas, Santa Barbara County and Ventura County, as two of the biggest gainers in business activity between 2010 and 2011, out of 200 cities in the nation. Job growth, wages and salaries, and GDP growth were considered in the rankings. The Santa Barbara area, which included Santa Maria and Goleta in the report, moved from 138th in the ranking to 99th, and Oxnard-Thousand Oaks-Ventura rose from 180th to 124th place.
The Milken Institute maintains offices in Los Angeles and Washington D.C., and pledges to advance “innovative economic and policy solutions that create jobs, widen access to capital and enhance health.”
Reach Executive Producer Leslie Velez here.