Sacramento, we’ve got a problem. CEO Magazine has ranked California dead last among the 50 states in its annual survey of the best and worst places to do business. An Ewing Marion Kauffman Foundation study of 6,000 small business owners has given California an F grade when it comes to business friendliness.
When your state is getting flunked by both the very largest corporations and the very smallest, it is time to sit up and take notice. When your tax receipts are falling billions of dollars short of projections each year, it is time to take stock of the situation. When Ohio has an unemployment rate of 7.5 percent and falling, while California is stuck far above the national average and relatively stagnant, it is time to do something.
A May 11 economic summit in the state capital has prompted economic development leaders from across California to sign on to a series of modest proposals. Among the supporters are the Chamber of Commerce Alliance of Ventura and Santa Barbara counties as well as the Economic Vitality Corp. of San Luis Obispo County. The letter asks the legislative leadership to make the Governor’s Office of Business and Economic Development the permanent clearinghouse for economic development and job creation. It also implores the legislature to give GO-Biz, as the office is called, the tools to promote California both within the U.S. and abroad, take the lead in evaluating whether new regulations are actually cost-effective, and take charge of innovation and entrepreneurship support that happens at the state level.
Government has become a big part of the problem in holding back California’s economic recovery. A ton of reforms ranging from pensions to the way businesses are taxed and regulated to labor rules need to happen over time.
Meanwhile, the way we have chosen to cut back government, by eviscerating our junior colleges, colleges and universities, is not the way forward. When it comes to economic development, the current situation, where companies such as Haas Automation get very little help when they talk about expansion out of state, is totally unacceptable.
California has a tough challenge. It needs to cut back on spending to balance the budget but also find ways to incentivize job growth and development in the private sector. That is the only way to create a more forward looking business friendly reputation. Getting all of the business generation assets in one organization and making it accountable for results would be a good first step on a very long road ahead.