California ranks worst state for business

May 6, 2011

By LISA RIZZO

For the seventh year in a row, California tops the list as the worst state to do business, according to Chief Executive magazine’s annual “Best & Worst States” survey which took the pulse of 550 CEOs across America.

The executives evaluated the states on a variety of issues, including regulations, tax policies, workforce quality, education resources, quality of living, and infrastructure.

Texas maintained its rank at number one — the best state for business. North Carolina and Florida rounded out the top three.

California is joined at the bottom by New York, Illinois, New Jersey and Michigan which make up the five worst states for business.

“A handful of states have made business-friendly policies a priority,” said J.P. Donlon, Editor-in-Chief of Chief Executive magazine.

Cypress Semiconductor CEO T.J. Rodgers told the magazine, “ABC — Anywhere but California. It’s expensive, it’s hostile to business, and environmental regulations are more of a drag on business than protecting the environment.”

The $668 million chip maker headquartered in San Jose is accustomed to business environments across the world, having plants in 10 countries.

“Today’s ‘soak the rich’ mentality hits business leaders especially hard,” says Marshall Cooper, CEO of Chief Executive magazine. “CEOs and entrepreneurs vote with their feet — and also pack up jobs and investment with them when they leave.”


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srichison

The baseball analogy fails unless you want the federal government to control all businesses and you take any state control and taxing authority away.


But this whole discussion misses the point. Businesses and those of us retirees with disposable income are leaving this state because it’s a lousy place to do business and the infrastructure is nearing next to worthless. Have you bought gas or diesel anywhere but California? Have you driven the highways of the rest of the states? Nowhere is more expensive to live. Only Mississippi has worse roads of the 28 states I’ve visited in the past 6 months. And fuel? Don’t even start on the premium California blend. Nevada sells the same gas for 30-40 cents less — it’s about the way the state governs and the tax structure. Until the budget mess is worked out and the tax structure changes, the state will continue to bleed money from corporations and those with disposable income escaping.


bobfromsanluis

Wow. Corporations are incorporated in individual states that set the laws governing how those incorporations work; how would you have the federal government take over that function, and more importantly, why would you do that? The reason that the federal government gets involved is when there is interstate business being conducted and the federal government regulates that on ALL businesses, not just corporations.

Do you know why our infrastructure is so bad? Look back at the Governors we have had; Reagan, Brown, Deukmejian, Wilson, Davis, Schwarzenegger and now Brown again. The Republican governors always hold back on infrastructure spending and the Democrats are always trying to clean up the mess left by the previous Republican so they have a hard time getting the infrastructure projects back up and running well. Yes gasoline and diesel are more expensive here in California and that should be addressed; maybe a standardized fuel nationwide would be a better system? As for California being expensive to live, well, yeah it is, but why are more people living here if it is supposedly so bad? How about an explanation about how high our taxes are compared to the rest of the US, and the US is compared to the rest of the world; how about addressing the notion that businesses have it “bad” here in California; this study, although somewhat older since it is from 2004, it does address some of the issues that conservative love to hammer on about California and taxes and so on. Take a look and maybe someone will learn something about our tax system and how we compare to other countries.


willie

One thought about gasoline

As we get more into clean and renewable fuel, governmemt will get less from fuel tax. I can see why some politicians opposes or “slow down” anything going green unless they already have their hands in the cookie box.


srichison

You’ve got to be kidding. As soon as a green technology becomes economically viable and takes any substantial portion of the market, the pols will have already figured out a way to tax it. They are not going to do without “fuel” taxes.


bobfromsanluis

Well sports fans, how about an analogy? Corporations are an “invention” of government; without government giving corporations the ability to exist, there wouldn’t be any, period. All businesses would have to be conducted by individuals or partnerships. Part of the cost of doing business as a corporation is following the rules and laws that govern how they are supposed to operate. So here is the sports analogy; imagine a professional baseball game played without any officials and no rules- that is what those in business who complain about regulations and laws would like to have available for them to operate their businesses like. Baseball is a fun game to play, an enjoyable sport to watch, but one of the biggest reasons why so many people enjoy the game is because all of the players have to follow the same rules. Why do so many players who skirt the rules have so many fans insist on an asterisk next to that player’s name on the record books? Because they didn’t follow the rules, they cheated. In business though, the cheaters who don’t follow the rules rip off investors and customers and sometimes each other, cheat on their taxes and generally behave badly and far too many of them get away with it. Without rules all that will follow will eventually end up in chaos, whether it is sports or business. Are there too many rules, laws or regulations? Sure, but the infield fly rules still stands. Oh wait, you mean for business, right? Well, yeah, there too, but who gets to decide what goes and what stays? Corporations? I certainly hope not, but given the Citizens United decision by the Supreme Court, who knows what will happen.


Typoqueen

Great analogy. Once again you nailed it bob!


isoslo

now imagine a baseball game with first, second, third and home plate umpires. Plus left, right and center field referees, a batting review committee, an environmental impact analysis group, concession audit committees and so on and so forth. They would have to add several hundred dollars to the ticket price to cover these costs, but they would not want to admit the true cost so they would have the general fund subsidize the costs and then rob the education budget to cover it. Games would last weeks due to the bureaucracy involved to making the simplest decisions like was his swing a legal swing in accordance with the no baseball player left behind act. Limited oversight is what keeps the game fun.


hotdog

Cute fantasy but no way. The extra costs should come out of the pockets of the bloated salaries of players and owners. Bob’s analogy is appropriate. I guess you have never been (or known, or cared) ripped off by an unregulated business (broker, doctor, mechanic, etc). The ‘buyer beware’ doctrine is cruel and crooked.

I don’t think baseball is so lightly oversighted.


rogerfreberg

Hey, I am not here to defend the Wall Street Barons who have dragged us down the holy road to third world status. But, beforeanyone points the finger at any entrepreneur struggling to make a living in Californication, I would take a real look at those who are really making the money with far less effort.


Have we forgotten the tools at the city of Bell? The ‘million dollar mayor?” Have we forgotten that some California university Presidents spend years of their time traveling on the tax payers nickle and are seldom seen on their university campus? How many public sector folks retire at above their regular pay?


Oh yeah, If the administrator of the city of San Luis Obispo needs to make so much more than the governor of our state… maybe we should replace him with her?? … or maybe, we are just paying some people in the public sector way too much? ya think?


hotdog

Yeah!


willie

When I was a young child I remember my grandfather saying SOS nothing changes.

As I got older I remember my dad saying SOS nothing changes.

Now that I am 62 I see why they said SOS nothing is gonna change SO-BS!

The ruling class has wealth and power by us to control us.

There is a set of laws and rules for the poor and shields for the rich.


willie

Incidently

Never believe what you see and only half of what you hear, including the death of Bin Laden


ososkid

Willie, never miss a chance to lower the bar


Black_Copter_Pilot

I’m with you Willie Bin Laden is alive and well. He has been seen holding a protest sign at the SLO Costco


willie

Black_Copter_Pilot

I like that, very good

All kdiding aside, at the report time of the invasion, it was rumored the actual invasion occurred a week before.


willie

Osos kid

Oh

Just gettin old

with the same old


knowthisatascadero

Calvertworthington, what an asinine statement to make. You are the epitome of the liberal, prejudice, elitist ilk that we have in this state and country. Look in the mirror; you will see what is wrong with this once great state and this great country.

The Coastal Commission, the Water Quality Control Board, the extreme environmentalists, the unions……………and so it goes……………..until it is gone……….


easymoney

If you own a business you would agree, if you work for someone else you wouldn’t care…

Example: Anyone who has gotten a building permit for a new building, some tenant improvements or even a sign can tell you it is not cheap nor easy. Any business who as paid for liability insurance can tell you it is not cheap nor easy. Any business that sells paint, fuel, building materials, food, health supplies, or even runs a beauty salon can tell you about the anmounts of OSHA, health dept. and environmental red tape just to open the doors. Then if you do get a building permit you are required to put in new sidewalks, public benches, architectural review compatable landscaping,and architectural building details, handicap access ramps and bathrooms (both for he and she) before the permit is ever signed off.

I am a small business owner and have been in business in this county for over 40 years and can say for certain and for sure that the ramp is getting steeper and the water deeper…


hotdog

I am way for plenty of controls since we cannot depend on most people to do the right thing, they simply don’t care. But I sympathize mightily with Money here. There must be a way to protect the public from nasty chemicals and other dangers while still making it easier for small business to operate.


My long standing fun thought is to announce ALL laws (including the IRS code) will be null and void in, say, ten years. Then we would have to boogie to replace them with modern, well thought out new regulations. Using computers any conflicts would be wiped out and the way fewer laws that we created in the ensuing ten years could be a lot better than the mess we have created over the last 200 years.


easymoney

If only it were that easy… The gooberment depends on us to pay for all these schemes and pipe dreams. I would venture to guess that most all of us want a clean environment and do not put up with polluting, in our homes and in our businesses.

It should econ 101, you have a great idea, you make that idea come true, you produce the widget, people buy the widget and you abide by the rules of common sense or you fail because your widget is not wanted…

Unfortunately our legislators have thrown common sense out the door and rule by rit of mandate which pays for their follys.

I agree with most folks who would love to see a trim government, run lean and strong without foisting folly on the very folks who want to step up and provide…

I think we are at a cross roads where if we the people do not stand up and say enough is enough, no one will be willing to take a chance on opening a business in this county or this state. I am close to retirement age and I for one will not really give a rats backside what it takes to run a prosperous business anymore. I do feel for those that will come after me and wonder what the hell were we thinking allowing many of these boondoggles to take place…

And the idea that huge corporations start out at the top is just ignorant, all fortune 500 companies, especially those power brokers here in CA started small and grew because they had a great ideas and the buying public loved it…


calvertworthington

What possible motivation would CEO’s have for giving our fair state such low ‘scores’? I do know that Texas is a lovely place to change planes and hire cheap labor. That fine humanitarian, Michael Dell, loves it. Of course Calif is facing a deficit problem, but, Texas has a worse deficit problem (Ca. 29.3% of budget vs. TX. 31.5%) even though Ca. has approx. 13 million more tax wasting residents.


Maybe the itchy/achy CEO’s like to keep needling for lower standards, as it’s their ilk. If we just let them run things their way, we’ll all be happier. Coal mining is a great career.


zaphod

Coal mining is a great career

would be if we did not have such liberal child labor laws


hotdog

And see http://www.huffingtonpost.com/2011/05/06/ceo-pay-high-pre-recession_n_858430.html for a brief look at our poor put upon CEOs who are barely making it while the rest of us are cleaning up.


r0y

For me, this is a slippery slope; as I am a Free Market Capitalist, and believe that one’s compensation should be on par with performance – even if it’s filthy-rich. Good companies do care about management to labor ratios in compensation, but we usually only hear about the really bad ones that skew the results to that sad-looking 300:1 crap we’ve had for the last decade.


I do not believe there should be millions in golden parachutes, bonuses, etc. for companies who perform poorly. I realize that I cannot have my cake, nor eat it here, but I think any system is corruptible over time so ultimately, we have to go with the “lesser of the evils” (all too familiar decision now-a-days).


I’d love to have a “corporate-free” Free Market, but that isn’t exactly being free, is it? It is a tough one.


Finally, here’s something for the old pipe: CEO to Labor compensation has risen proportionally to amount of Government regulations and controls. Think about it, we have been given LOTS more rules, laws, and regulations – at the same time, management compensation seems to have gone through the roof. Call me a conspiracy nut, but that’s an unusual coincidence.


Typoqueen

“Labor compensation has risen proportionally to amount of Government regulations and controls. Think about it, we have been given LOTS more rules, laws, and regulations – at the same time, management compensation seems to have gone through the roof.”


Yes, those govt. rules, laws and regulations have changed to help those that are already making tons of money, they don’t mind the new rules and regulations, they’re called tax loopholes and labor rights. Most of us don’t want 12 year old Sally working for 2$ per hour 10 hours a day making GE washing machines and most of us don’t want to pay the taxes for GE either but that’s what’s going on.


I’m not against corporations. For crying out loud I’m a corp. The owner of Costco runs his corp in a very fair and profitable manner. I’m against big corps taking their work force out of the country and not helping our economy and then on top of that not paying any taxes to this country after making a fortune on us. We could change tariffs and fair trade agreements and get these manufactures back here. We are rewarding big corps to manufacture off shore.


Jerry Brown brought business to Oakland and if the neocons will let him he’ll bring business to Ca..


pasoparent5

typo, please clarify. How will Jerry Brown bring business to California?


hotdog

This confirms the thrust of the commentary in (now) last week’s New Times by Jim Duenow about corporate interests. No feeling for quality of life, the good of the people or environment. Just money, unfettered access to money. Of course they would say that, since California has often led the nation is thoughtful initiatives to protect the environment (where we all live, breathe and drink).

I consider this a compliment to our state, being criticized by big business. One of my great disappointments in life was not making it on Nixon’s ‘enemies list’.


r0y

I’m going to agree with hotdog on this one… sort of. I think having CEO’s criticize an area (didn’t want to say environment) as hostile to business – or just “worst” of the 50 – is telling to the demands of the local populace, by way of their elected representatives, of how they want their “area” treated.


While I do not like big government, I am not a fan of the idea of a corporation; like big government, it removes personal responsibility.


I also do not think the state should be punitive to business, the people, via the state, cannot just allow business-nature to take it’s course sometimes.


racket

Interesting that the worst five are also five of the most populous states…


racket

Oops, I guess my theory goes nowhere: Téjas and Florida are both in the top 5 population-wise, but ranked as best for business.


http://en.wikipedia.org/wiki/List_of_U.S._states_and_territories_by_population


BeenThereDoneThat

I think the bigger point is that the worst five ranked as doing business with, are also the states with some of the worst financial problems. Gee I wonder if any liberals understand the connection?? My guess is probably not.


Also two of these that I know of off the top of my head (without looking up the rest) California and Michigan, are also at the top of the list in unemployment. Again gee do my favorite libs get the connection? Again they will come here I’m sure and post, the evil doings of all these big business while missing the connection between all this.


Paso_Guy

Also close the most liberal as well


Green is bad for business, a truth that neither the left nor right can deny


Mr. Holly

Yes! The grass is greener on the other side of the fence. That is until the climate changes and it turns to Brown-no pun intended.


zaphod
Mr. Holly

Da-Do you think any of the politicians will even address this? I’m sure they will by adding more and more regulations that will even make things worse. The people of California need to wake up and get a clue of what is going on. The state is on a “death march” killing businesses along the way.


zaphod

No worries we are insured!


Typoqueen

Another good article, thanks.