The Various Threats to California’s Failing Economy
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California has been having issues with its economy for some time now. High taxes and ridiculous regulations have been affecting the locations’ ability for growth, leaving it in the dust. When asked how regulations were affecting operations, the president of California Custom Fruits and Flowers said that:
* The workers compensation insurance has gone up by 300% in the last five years.
* High taxes and tough environmental laws have made day-to-day operations impossible to navigate.
California has been having issues with its economy for some time now. High taxes and ridiculous regulations have been affecting the locations’ ability for growth, leaving it in the dust. When asked how regulations were affecting operations, the president of California Custom Fruits and Flowers said that:
* The workers compensation insurance has gone up by 300% in the last five years.
* High taxes and tough environmental laws have made day-to-day operations impossible to navigate.
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California is Shooting Itself in the Foot
Wayne Ratkovich, CEO and president of The Ratkovich Company, said that the environmental quality act in California, and the litigation that follows, frequently bogs down construction projects. This is particularly upsetting, considering it is the mission of his company to improve quality of life in urban developments. The regulations have had a severe impact on the company’s ability to build necessary facilities. Today, companies are even struggling to find anyone who will invest in California condos because of the amount of litigation.
It seems, at the moment, that the only people benefitting from California’s state of affairs are those banging their head against a wall. Of course, the low opinion of the business climate and future economy of California goes beyond business executives. The magazine ‘Chief Executive’ ranked California as the worst state in the entire country to do business for ten years in a row.
The Tax Foundation is not as harsh, putting California two spaces from the bottom when it comes to state business tax. However, the current belief is that anyone who wants to stay put in California should have an exit strategy firmly in mind and possibly land already owned in a more desirable state. The state has also recently imposed new regulations on farmers markets, after tightening the screws on the contracting industry. State officials have also suggested that the temporary tax hikes may become permanent.
The Agriculture Sector
One area worth looking at in California’s economy is the agricultural sector, predicted to see severe falls over the coming years. According to analysts, the 8-mln acres of irrigated farmland should decrease by over 50% in the next 20 years. Although the agricultural sector, along with other connected industries such as packing, transportation, and food processing make up around 4% of the state’s economy, a significant decrease in farming could cause serious problems for the future.
Even Mother Nature has it in for California
As climatologists continue to predict dry weather conditions for the next twenty years, California, which is currently still in its third year of drought, is facing serious threats to its economy and way of life. The drought is exacerbating poverty, especially in the central valley, and today most of the wells in several counties are running dry. The entire region at this time is dependent on water delivered by local authorities in buckets and tanks. Most local residents can’t afford the $10-20,000 needed to drill for a new well, and that California missing the oil shale boom is making the state even poorer.
