An item we missed while on break is yet another report claiming that California is not business friendly. The Small Business and Entrepreneurship Council ranked California 50th in an extensive index measuring state policy measures on small business.
The report noted it ranked “the 50 states according to 47 different policy measures, including a wide array of tax, regulatory and government spending measurements.”
According to the study’s author, Raymond Keating, the Small Business and Entrepreneurship Council’s chief economist, “Quite simply, the states are compared and ranked according to how state and local government policies impact costs and incentives for entrepreneurship and investment. In turn, such risk taking is critical to economic growth, income growth and job creation.”
Among California’s neighbors, Nevada ranked second as a business friendly state and Arizona ranked 13th.
Of the many categories rated by the study, California ranked first in only one — Adjusted Unemployment Taxes (Maximum State Tax Rate Applied to State Wage Base and Then Taken as a Share of State Average Pay). That could change considering the debt in unemployment insurance the state faces. A tax increase on business is one of the solutions under discussion.
As far as taxes go, California rated 50th – meaning the highest in personal income tax, capital gains tax rate, and gas tax. The state was ranked 28th in property tax (as a share of personal income) and 26th in sales, gross receipts and excises taxes (as a share of personal income).
On some other indicators, California was 43rd in electric utility costs; 44th in workers compensation cost (per $100 of payroll); 43rd in per capita state and local government debt and 47th in highway cost effectiveness.
California did get into the positive end of the rankings in a couple of other categories finishing fourth in both revenue from the federal government and the number of state and local employees per capita.
The full report from the Small Business and Entrepreneurship Council is here.