California ranks last among the states and Washington D.C. as a place to do business, according to Chief Executive 
Such assessments are important in the interstate wrestling match for economic growth, Chief Executive notes. “High-stakes competitions for business expansion are nothing new. But with the current unemployment rate, the stakes have gotten much higher. As a result, negotiations for business expansion in 2010 will be more complex and financially significant.”
The publication is so harsh about the California that it calls the state “the Venezuela of North America.” (Click on chart for a larger view):
Source: Chief Executive
Top ranked, for the second year in a row, is Texas followed by North Carolina and Tennessee. Just above California at the bottom of the list are New York, Michigan and New Jersey.
Among the negative factors for business in California mentioned by the magazine:
- Among the highest state income and sales taxes in the nation
- Unemployment statewide of 12.6%, one of the highest in the nation
- State politics seem consumed with how to divide a shrinking pie rather than how to expand it
- Union density is increasing, contrary to national trend, from 16.1% of workers in 1998 to 17.8% in 2002
- Unfunded pension and health care liabilities for state workers top $500 billion and the annual pension contribution has climbed from $320 million to $7.3 billion in less than a decade.
Here’s what some CEOs said about California as a place to run a company:
“Texas is pro-business with reasonable regulations while California is anti-business with anti-business regulations.”
“California is terrible. Even when we’ve paid their high taxes in full, they still treat every conversation as adversarial. It’s the most difficult state in the nation. We have actually walked away from business rather than deal with the government in Sacramento.”
“The leadership of California has done everything in its power to kill manufacturing jobs in this state. If we could grow our crops in Reno, we’d move our plants tomorrow.”
California is the only state to receive a failing grade in the magazine’s “tax and regulation” category. Its workforce quality and living environment received “B” grades, but the worst grade given in those categories was “C-” so California didn’t improve its standing much with those higher grades. Click here to see each state’s grade in each category.
More than 650 CEOs were asked to grade states in which they do business on 16 factors within the three categories and to rate how important each factor is to them in their business. For example, one of the most important factors is the perceived attitude of government to business. That’s one of California’s lowest scores. On the other hand, California’s best score is in arts and institutions. But that is factor of least importance to the CEOs.
Here’s how California and Texas score on the 16 factors compared with the national average and importance to CEOs (click on chart for a larger view):
Source: Chief Executive
Chief Executive says, “State wars for business, employing tax incentives, training grants, land acquisitions and other devices, could become common and fierce.”
Click here to read the report.
Other business stories…
- O.C. relocation expert in taxes vs. jobs video
- Manufacturer leaves state for Texas
- List names 100 companies leaving California
- Two companies leave Orange County
- O.C. auto maintenance firm moves to Canada
- Web site notes companies that left California
- Bill would open state contracts to small biz
- State’s economic forecast fifth-worst in U.S.
- Local small-firm building loans triple
- Will O.C. innovation, new jobs be killed?
- Who rates best: small biz or government?
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