In June of 2010, Gov. Jerry Brown of California signed a bill that required internet-retailers to collect taxes from sales transactions. Immediately after, Amazon.com sent messages severing their ties with approximately 10,000 sales-associate partners so they could not be forced to do so.When I saw a Facebook post about some 760 new laws taking effect on the first of the year, I wondered what it might do to the economy. It sounded excessive. So, it made me curious enough to go through official sites to see what all this looks like on paper. Objectivity was important, however. I could not develop an objective view unless there is context. A gallon of water in a kettle is one thing. A gallon of water in a vast ocean is another. What California has going for it is that it remains an economic power. What it does not have going for it is that many companies are leaving the state.
QUICK FACTS TO CONTRAST CALIFORNIA
CALIFORNIA - the 8th largest economy with a GSP of $1.91T
ITALY - the 7th largest economy with a GDP of $2.24T
RUSSIA - the 9th largest economy with a GDP of $1.89T
It is true. If California were a country, it would be the 8th largest economy in the world with a Gross State Product (GSP) of $1.91T. It would place right below Italy, which has a GDP of $2.24T and right above Russia, with a GDP $1.89T. Yet, with all it’s attributes, companies have been leaving for states that are perceived to be more business friendly.
High profile departures of companies in the last three years show the unique challenges that the state grapples with. On one hand it has a pool of highly educated workforce and an advanced infrastructure to support commerce. On the other hand, the state has burdensome taxes and regulations that tend to stifle businesses. Some even claim that the legislature is broken.
Many business owners and executives that have packed up for other states point to the high cost of doing business in the sunshine state. The exact number of departures are elusive because no current and dependable data is available to determine how many companies have actually left the state. Some may have closed. But the trend is clear and could not be ignored, because a percentage of employees who do not move with their companies also end up on the unemployment registry.
A survey taken by Chief Executive.net of 500 CEOs around the country ranked California #50 - as the worst state to conduct business in the entire country. The author said that the poll “considered a wide range of criteria, from taxation and regulation to workforce quality and living environment.”
Another study was recently published by Forbes Magazine ranked California #39 on their survey of the best and worst states to do business in. It took into consideration six different metrics, including costs, labor supply, regulatory environment, current economic climate, growth prospects and quality of life, compiled from several sources including data sets prepared by Moody’s.
The list of bills passed were as eclectic as could be expected. There were budgets, elderly laws and updates on traffic laws, to name a few. Have a look:
THE 745 NEW LAWS THAT TOOK EFFECT ON JAN. 1, 2012
OTHER ARTICLES:
LA TIMES - AMAZON.COM DUMPS 10,000 CA ASSOCIATES
LA TIMES - 760 NEW LAWS IN CALIFORNIA
FORBES - WORST & BEST STATES TO DO BUSINESS
CHIEF EXECUTIVE - BEST & WORST STATES TO DO BUSINESS
