Business

California unfriendly to small businesses, survey finds

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Betsi Fores The Daily Caller News Foundation

California received an F grade in being one of the worst states to be a small business owner, according to asurvey of over 6,000 small businesses conducted by Thumbtack.com.

Other states that also received failing marks include Hawaii, Vermont and Rhode Island. Idaho, Texas, Oklahoma and Utah all scored A-pluses.

Four of the five largest cities in California — San Francisco, Sacramento, Los Angeles, and San Diego — scored an overall D or lower, for having complex tax codes and high regulation and environmental standards that are unfriendly to small businesses.

In a 2011 study done by the D.C.-based Tax Foundation, California ranks 48th out of 50 in overall business friendliness. The only states it outperformed were New York and New Jersey.

California budget economists quickly dismissed the findings.

“California added 230,000 jobs in 2011, and personal income grew by $100 billion, far outpacing the nation,” Gov. Jerry Brown’s spokesman told the Los Angeles Times. “Our state is attracting business and investment from around the world.”

If the state is attracting business and investment, the results don’t seem to be showing up in its revenues. The state collected far less in business taxes this last year, according to the Huffington Post, forcing California into $2 billion in cuts.

California also ranks among “the country’s most broadly licensed states, requiring government approval for certain occupations,” writes the LA Times.

study by the Institute for Justice found that 62 of the 102 low- and moderate-income occupations surveyed required occupational licenses. “Louisiana licenses 71 occupations, the most in the country, followed by Arizona with 64,” notes the LA Times.

California workers in these fields looking for jobs can expect to spend an average of $300 and 549 days on education and experience requirements to achieve licensing. License-required jobs include tree trimmers and funeral attendants.

In an op-ed that appeared in the LA Times last November, Wendell Cox and Steven Malanga write, “For years, California could rely on its temperate climate and a talented workforce to attract and keep businesses even as taxes and regulations increased. No more. In surveys, executives regularly express the view that California has one of the country’s most toxic business environments.”

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