Ross Grove / Foter / CC BY
A group of California business people gather last month at a confab hosted by the San Gabriel Valley Economic Partnership to discuss the challenges of operating in the state. What's the takeaway in a news story about the meeting? "Cynthia Kurtz, president and CEO of the San Gabriel Valley Economic Partnership, acknowledged that California's stifling taxes, regulations and environmental mandates won't be revamped to more reasonable levels anytime soon."
Jesus fucking Christ. Why not just throw in the towel, already? Or at least load up the trucks and head for the state line.
The rest of that San Gabriel Valley Tribune story is just as cheery as that quote above suggests.
When asked how California's regulations are affecting their operations, Mike Mulhausen, president of California Custom Fruits & Flavors, was quick to respond. "Since 2009 our workers comp insurance has gone up 300 percent," he said. Strict regulations, high taxes and tough environmental laws have made day-to-day operations increasingly costly and tough to navigate. That was the consensus of a group of local business leaders who met Wednesday in Walnut to discuss the challenges they face. … Wayne Ratkovich, president and CEO of The Ratkovich Co., said construction projects are frequently bogged down by California Environmental Quality Act (CEQA) regulations and the litigation that often follows. His company's mission is to profitably build developments that improve the quality of urban life. "It's had a dramatic impact on the ability to build facilities that are needed," he said. "It's rare to find an institutional investor who will invest in California condos because of all the litigation."
Sounds like a great environment for masochists—which might well be a good description of those who continue to bang their heads against the wall if they sincerely believe "that California's stifling taxes, regulations and environmental mandates won't be revamped to more reasonable levels anytime soon."
That low opinion of the California business climate isn't confined to a room full of depressed busines executives. Chief Executive magazine has ranked California as the single worst state in which to do business for ten years in a row. The magazine quotes a CEO saying, "California's attitude toward business makes you question why anyone would build a business there."
The Tax Foundation isn't quite so harsh; it puts California at 48 out of 50 in terms of state business tax climate—New Jersey and New York fare worse. "The states in the bottom 10 suffer from the same afflictions: complex, non-neutral taxes with comparatively high rates."
Forbes is less tough still, putting California at 39—thought that's 43 for regulatory environment. The upwards adjustment seems to be largely due to an optimistic perception of growth prospects in what remains a ginormous economy with lots of venture capital for those willing to stay put.
But those who do stay put might want to keep an exit option in mind. The state just imposed new regulations on farmers markets, of all things. That's after tightening the screws on the contracting industry. State officials also see opportunities coming up to make "temporary" tax hikes permanent.
That should do wonders for the business environment.
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