California is barely a middle-of-the-pack performer when scoring the states business climate against the rest of the nation.
California got a below-average No. 30 ranking among the states when my trusty spreadsheet looked at eight yardsticks of economic well-being from a business perspective. Thats not terribly surprising, given all the C-suite criticism of the states often pro-consumer leanings.
The nations business-friendliest locales, according to this scorecard, are states frequently cheered by executives with large, fast-growing economies: Utah, Florida, North Carolina, Texas and Arizona.
States at the bottom of this scorecard include some of the nations smallest economies – Hawaii, Louisiana, Alaska, New Mexico and Rhode Island.
Lessons learned
So, what does the Golden States mediocre scores tell us about Californias business climate? Well, ponder its grades – from worst to best – in these eight metrics that built the rankings, stats that are decidedly sympathetic to bosses concerns
Tax Foundation: This taxpayer watchdog group scored California third-worst for business taxation. Only New Jersey and New York ranked lower. After California came Connecticut and Massachusetts.
Corporations pay the least to governments in Wyoming, South Dakota, Alaska, Florida and Montana. Texas ranked 13th best.
US News: The magazines annual best state to live in rankings contain two monetary slices: the economy and opportunity. California ranked fourth-worst when these two business grades were averaged, ahead of Louisiana, New York and Mississippi.
REAL ESTATE NEWSLETTER: Get our free Home Stretch by email. SUBSCRIBE HERE!Idaho scored the best, then Montana, New Hampshire, Utah and Vermont. Golden State rivals Texas and Florida were No. 29 and No. 25, respectively.
Rich States/Poor States: This conservative-leaning economic report ranks states on business climate and economic performance. Californias average rank was ninth-lowest. Worst states by this math were Illinois, Vermont, Maryland, New York and Hawaii.
Tops? Utah, Idaho, Arizona, Texas and North Carolina. Florida was No. 7.
Forbes: When it came to the places where you should start a business, this magazines website ranked California No. 37.
38 QUESTIONS: What can fix Californias housing mess? CLICK HERE!Best spots were North Dakota, Indiana, Arkansas, South Dakota and North Carolina. Worst? Vermont, New York, Washington, New Mexico and Florida. Texas was No. 32.
CNBC: The business news networks best state for business scorecard – it sort of mirrors my scorecard – placed California at No. 23.
No .1 was Virginia, then North Carolina, Texas, Georgia and Florida. Lowest ranked? Hawaii, Mississippi, Alaska, Louisiana and Montana.
GDP: Despite all the hurdles California creates for business, its economic growth remains robust. Over the past five years, Californias economy ranked 13th-best for the expansion of its gross domestic product – the broadest measurement of business output.
The swiftest growth was in Idaho, Florida, Nevada, Tennessee and Arizona. Texas was No. 7. The national laggards were North Dakota, Louisiana, Hawaii, Delaware and Illinois.
WalletHub: This grading of regional economic muscle gave California a No. 5 rank behind only Washington, Utah, Massachusetts and Texas. Florida was No. 7.
The weakest state economies were Mississippi, Hawaii, West Virginia, Arkansas and Louisiana.
Inc 5000: For all the noise about big-name companies departing, Californias economic secret sauce is its entrepreneurs knack for creating new ventures.
California ranked No. 1 for the number of firms it has on Inc magazines 2024 list of most-successful small companies. Then came Texas, Florida, New York and Virginia.
The states with the fewest among the 5,000 honored firms were Alaska, West Virginia, North Dakota, New Mexico and Montana.
Bottom line
Its no secret California policymakers dont see eye-to-eye with corporate interests on many topics.
But Golden State political leaders might note a run-of-the-mill score for something they often brag about – the nations largest economy, by numerous measurements.
Remember, heft isnt always about quality. Plus, historic patterns dont always repeat themselves.
Yes, nothing is more polarizing than the Californias economic policies. Thats confirmed by a quirky statistical measurement of consistency known as standard deviation.
HOW NIMBY ARE YOU? Ponder common objections to new housing. TAKE OUR QUIZ!When applied to each states eight individual grades used in my scorecard, this geeky math shows Californias grades had the highest deviation. Next for heavily mixed reviews were North Dakota, South Dakota, Montana and Arkansas. Texas had the 24th-highest deviation and Florida was ninth-highest.
Conversely, the highest statistical agreement was found in three of the top four business climates – North Carolina, Utah and Tennessee.
Politically speaking
Measuring these rankings against the recent presidential election suggests that pro-business was a winning argument in 2024.
The states that supported Donald Trumps victory averaged a No. 21 scorecard rank vs. No. 33 for the states that supported Vice President Kamala Harris (minus the District of Columbia, which was not graded by my scorecard).
Note that the six states that flipped to support Trump vs. the Democrats in 2020 were middle-of-the-pack performers on my scorecard: Michigan (No. 18), Wisconsin (No. 22), Arizona (No. 23), Georgia (No. 24), Pennsylvania (No. 32) and Nevada (No. 38).
Jonathan Lansner is the business columnist for the Southern California News Group. He can be reached at jlansner@scng.com