California is hardly a middle-of-the-road performer when scoring the state’s business climate against the rest of the country.

When my trusty spreadsheet examined eight measures of economic well-being from a business perspective, California ranked 30th below average among states. This is hardly surprising, given senior executives’ criticism of the government’s often pro-consumer leanings.

According to this scorecard, the business-friendly parts of the country are states often acclaimed by executives as having large, fast-growing economies: Utah, Florida, North Carolina, Texas and Arizona.

States at the bottom of this scorecard include some of the nation’s smallest economies: Hawaii, Louisiana, Alaska, New Mexico and Rhode Island.

lessons learned

So what do the Golden State’s mediocre scores tell us about California’s business climate? Consider how they score (from worst to best) on these eight criteria that make up the rankings, statistics that are certainly sympathetic to bosses’ concerns…

Tax Foundation: This taxpayer watchdog group ranked California the third-worst score for business taxation. Only New Jersey and New York ranked lower. After California came Connecticut and Massachusetts.

Companies pay the least to governments in Wyoming, South Dakota, Alaska, Florida and Montana. Texas ranked 13th best.

US News: The magazine’s annual “best situation to live in” ranking includes two monetary brackets: economy and “opportunity.” California ranked fourth worst when averaging these two business scores, ahead of Louisiana, New York and Mississippi.

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Idaho scored best, followed by Montana, New Hampshire, Utah and Vermont. Golden State’s rivals Texas and Florida ranked 29th and 25th, respectively.

Rich States/Poor States: This conservative-leaning economic report ranks states by business climate and economic performance. California’s average ranking was ninth lowest. According to this math, the worst states were Illinois, Vermont, Maryland, New York and Hawaii.

Tops? Utah, Idaho, Arizona, Texas and North Carolina. Florida was ranked 7th.

Forbes: This magazine’s website ranked 37th in California when it comes to places to start a business.

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The top locations were North Dakota, Indiana, Arkansas, South Dakota and North Carolina. The worst? Vermont, New York, Washington, New Mexico and Florida. Texas was ranked 32nd.

CNBC: The business news network’s “best state for business” scorecard — which sort of mirrors my scorecard — ranked California 23rd.

No. 1 was Virginia, followed by North Carolina, Texas, Georgia and Florida. Lowest ranked? Hawaii, Mississippi, Alaska, Louisiana and Montana.

GDP: Despite all the obstacles California creates for business, its economic growth remains strong. Over the past five years, California’s economy has ranked 13th best for growth in gross domestic product, the broadest measure of business output.

The fastest growth occurred in Idaho, Florida, Nevada, Tennessee and Arizona. Texas was ranked 7th. Lagging behind in the national rankings were North Dakota, Louisiana, Hawaii, Delaware and Illinois.

WalletHub: This ranking of regional economic strength gave California 5th place, behind only Washington, Utah, Massachusetts and Texas. Florida was ranked 7th.

The weakest state economies were Mississippi, Hawaii, West Virginia, Arkansas and Louisiana.

5000 included: For all the noise about major companies leaving, California’s secret economic sauce is the ability of entrepreneurs to create new ventures.

California ranked first in Inc. magazine’s 2024 list of the most successful small companies in terms of the number of companies it owns. Next came Texas, Florida, New York and Virginia.

The states with the fewest awards among the 5,000 companies were Alaska, West Virginia, North Dakota, New Mexico and Montana.

In conclusion

It’s no secret that policymakers in California disagree with corporate interests on many issues.

But the Golden State’s political leaders may get mediocre points for something they often boast about: the nation’s largest economy by countless measures.

Remember, weight is not always related to quality. Additionally, historical patterns do not always repeat.

Yes, nothing could be more polarizing than California’s economic policies. This is confirmed by an interesting statistical measure of consistency known as “standard deviation.”

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When applied to the eight individual scores of each state used in my scorecard, this geek math shows that California’s scores have the highest variance. Following rather mixed reviews were North Dakota, South Dakota, Montana and Arkansas. Texas had the 24th highest deviation, while Florida had the ninth highest deviation.

Conversely, the highest statistical agreement was found in three of the top four business environments (North Carolina, Utah, and Tennessee).

Politically speaking

Comparing these rankings to the last presidential election shows that “pro-business” is a winning argument in 2024.

States supporting Donald Trump’s victory ranked 21st on average on the scorecard, while states supporting Vice President Kamala Harris ranked 33rd (excluding the District of Columbia, which was not ranked on my scorecard).

Note that the six states that returned to support Democrats against Trump in 2020 are middle-ranking states 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 Southern California News Group. He can be reached at [email protected].

First Publication Date: November 14, 2024 8:08 AM PST