The California Foundation for Commerce and Education (of which I am the president) this week released its 2012 survey of business executives detailing current attitudes about the state’s economy, business climate, and budget. The study was sponsored by the California Chamber of Commerce.

The entire survey can be found here.

Business executives are more optimistic about the state’s economy, as well as on the prospects for their own businesses. But they continue to have a poor outlook on the California business climate, mainly citing overregulation as the key culprit.

Economic and Business Outlook


State Business Climate


State Government Policies


Health Care


State Budget Crisis

  • “Holding the line on taxes, regardless of the impact this may have on the budget or leading to major cuts in services,” remained the choice of a plurality of business owners, by a narrow margin of 37%.
  •  “Protecting funding for essential services like education, health care and public safety, even if that means higher taxes,” was favored by 35% in 2012 – which is within the margin of error when compared with the previous choice.
  • “Balancing the budget, even if that means raising some taxes and making cuts to essential services,” was favored by 28% in 2012.


Policy Reforms

  • Ensure that whatever mix of new taxes and spending cuts are adopted, the end result is a truly balanced budget without gimmicks.
  • Reform public employee pensions to more resemble private sector 401(k) plans.
  • Conform overtime rules to federal law, which would return California to a 40- hour work week before adding on any overtime (rather than on each eight-hour day) to provide workers and employers greater flexibility and savings.
  • Place a cap on all state spending so it cannot grow faster than the rate of inflation plus population growth.
  • With approximately half the state budget going to education, reform the education system to strengthen the role of principals, expand teacher training, ease termination of incompetent teachers, and pay higher salaries to teachers who improve student performance.
  • Ensure that one-time revenues cannot finance ongoing state programs.
  • Place a cap of up to 5% of an employee’s salary as the most a public agency can contribute to an employee’s retirement per year.
  • Reform environmental regulations to increase certainty and reduce the time to develop a project.
  • Provide long-term funding certainty for California universities and colleges to ensure continued innovation and skilled workforce.

The California Business Executives Attitudes survey was conducted between February 20, 2012 and March 19, 2012. A total of 699 California business executives were polled for the survey.