California Wins ‘Worst State to do Business’ for 11th Year

It must be rainbows, butterflies and unicorns for Sacramento liberals, as California successfully defended its crown as America’s CEOs again named California the worst state to do business–for the eleventh straight year.

Business leaders highlight California state and local government officials’ negative attitudes toward business. CEOs blamed the cost of trying to comply with the state’s “capricious” regulatory system, calling it a job killer, especially for “smaller firms that are the least able to bear the costs.”

The annual ChiefExecutive.net survey of 500 CEOs from across America grades states on a “variety of measures of tax and regulatory regime, the quality of the workforce and the quality of the living environment” that are viewed as critical components of its business climate,. Employees’ attitude toward management is also considered, since it is a crucial factor in the perceived quality of a region’s workforce. Important “quality of living” factors include the quality of public education, health, cost of living, crime and housing affordability.

Texas continues to be seen by CEOs as “The Best” state in America to do business,  despite the recent serious oil sector slowdown. Since the Great Financial Crisis began in December 2007, Texas gained 1.2 million net jobs, while “only 700,000 net jobs were created in the other 49 states combined.”

Texas continued its 11-year reign as the best state overall. But Florida, which moved up to No. 2 last year, overtook Texas in “quality of living” measure. Florida Governor Rick Scott told Chief Executive: “We’ve learned from Texas how to tell our story better and it helps that we’ve cut taxes 25 times–about $400 million.”

Scott has been proudly highlighting what he calls the “flywheel effect,” in which big name companies like Hertz, Amazon, Deutsche Bank and Verizon invest in the state, adding jobs and creating momentum that causes more companies to look at Florida as a destination. Scott emphasized that “Business is comfortable that we’ll keep the tax base low and improve our workforce.”

California continues as the cellar dweller, while New York remains the second worst. Both scored negative marks for high taxes, egregious regulations and poor workforce quality. Due to similarly depressive business climates; Illinois, New Jersey, Massachusetts and Connecticut again rounded out the bottom feeders.

The CEO poll did not find that Google, Apple, Intel and HP are likely to move out of California. But CEOs commented that these Silicon Valley companies tend to avoid expanding locally. “Google server farms tend to be built in lower-tax states like Nevada, Arizona and Iowa. Were it not for its climate and excellent university system, it is a wonder that more California companies don’t leave.”


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