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America's worst states for business los angeles

No. 47: California

Joining the Bottom Five this year is California, which tumbles to 47th place from 40th last year.

California moves into the low ranks largely because it has raised its Cost of Doing Business just as businesses increasingly demand lower costs, and as we give the category more weight in our study.

Last fall, California voters approved Proposition 30, which temporarily raises taxes on high earners and increases the state sales tax. The move is supposed to fix the state's disastrous finances once and for all, and, indeed, Gov. Jerry Brown and the Legislature this year found themselves in the unaccustomed position of deciding what to do with a budget surplus.

But in the process, California solidified its position as America's most expensive state for business, finishing dead last in our Cost of Doing Business category. Not only are taxes high, but so are wages, utilities and rent.

California is nothing if not a land of extremes, however. No state comes close for Access to Capital, where California finishes first. And it finishes second, behind New York, for Technology & Innovation.