Ellen and I, with friends, attended the Annual Mercatus Center Retreat in Scottsdale AZ last month. Browsing the table of available publications I spotted one on Freedom in the 50 States, and thumbed to the section on California. Out of the 50 states, California is listed as 49th, right at the bottom. What interested me was the lack of change since 2009. Here is what the report has to say about the California Policies that shape economic freedom, where California ranks 44th, withs two points of improvement since 2009. However, in the regulator category California is number 50, at the very bottom.
California not only taxes and regulates its economy more than most other states, but also aggressively interferes in the personal lives of its citizens.
Government consumption (at 11.0 percent of personal income) and employment (at 12.8 percent of private-sector employment) are about average, but debt is high (at 25.8 percent of income). The budgetary categories on which California spends significantly more than the rest of the country include general administration, housing and community development, utilities, and employee retirement. Individual and business income taxes are well above average. The total tax burden comes to 10.8 percent of income, a standard deviation above the national average.
Government interference in the land market is rife, as California’s zoning laws are among the toughest in the country, and the state is one of just four to authorize rent control, while eminent domain abuse has seen only token reform. Labor laws impose many costs on employers, from the minimum wage and a universal workers’ compensation mandate to short-term disability insurance and paid family leave. Health insurance mandates add about 49.5 percent to the cost of a premium of a policy without any of the mandated benefits. However, there is no community rating, guaranteed issue, or prior approval of rates in the nongroup health insurance market. Occupational licensing is rampant, and the nursing professions are tightly regulated. The state’s liability system is one of the poorest in the nation and has gradually worsened over time. The life and property/casualty insurance markets are among the most regulated in the nation. On the plus side, there is no certificate-of-need (CON) law for hospital construction.
More details can be found HERE. It is easy to see why companies are leaving California and few are coming to the state. Net migration rate is -4.5%. These larger trends make the Nevada County Economic Resource Council’s job much more difficult.