According to CEOs, California is Dead Last

Tom Scott
CA Executive Director, National Federation of Independent Business

If I were trying to grow a state’s economy, I would probably listen to someone who knows how to create jobs and is making decisions on behalf of shareholders, investors and employees. I think the time has come to take seriously all these various surveys that come out and rank California at the bottom or close to the bottom of nearly every category when it comes our business climate.

In its ninth annual survey, Chief Executive magazine polled 736 CEOs – the highest number ever – about the best and worst states in which to do business. The survey asked business leaders to grade states based on the following metrics: taxation and regulation, quality of workforce and living environment. California placed dead last – the same rank it received in 2012 – right behind Illinois and New York. Texas ranked No. 1, followed by Florida, North Carolina and Tennessee.

While legal reform might not be specifically listed as one of the issues in the survey, it was likely on the minds of these 736 CEOs when they responded. The legal climate is as critical to whether a business stays in a state or relocates as anything else, and a single abusive lawsuit can cost a company tremendously.

While California is moving slowly in the right direction on legal reform, a lot more needs to be done. For decades we have heaped more and more laws and regulations on the books that have resulted in more and more lawsuits. Last year nearly 1.1 million civil lawsuits were filed in California.

If California is to ever climb its way back up this CEO list, it is going to have to make big progress on reforming its legal climate.

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