Regional Report: The West

“California is anti-business,” asserts Matthew Szuhaj, director at Deloitte Consulting in the San Francisco Bay area. “There are a host of things the state could do to improve its business climate, but the economy is not hemorrhaging. There is still a robust eco-system for innovation. Consider that the amount of venture capital invested in California today is greater than all other states combined.”

“There are a host of things California could do to improve its business climate, but there is still a robust eco-system for innovation.”

Talk of California’s tarnished appeal eludes Ryan Black. The SoCal native never looked beyond his San Clemente roots when seeking a corporate headquarters for Sambazon, the fruit juice company he and his brother cofounded in 2000. “Southern California is a beautiful place,” he states. “I travel around the world. I think where we live is a little crowded, but I wouldn’t trade it. It’s wonderful.”

Nevada (No. 8)
The fastest-growing state for nearly two decades before the Great Recession, Nevada more recently has led the country in per capita job losses, shedding 200,000 during the downturn. The state still depends heavily on gambling and tourism, which employs one out of four workers. State GDP growth lags the national average, and April’s 8.5 percent unemployment rate was higher than every state but Rhode Island. Favorable cross-sector hiring news in early spring offered Nevadans some encouragement; signs of a construction industry rebound are evident. Nevada’s tax burden ranks 42nd out of the 50 states and is No. 3 in the Tax Foundation’s Business Tax Climate Index.

“Nevada doesn’t have a corporate income tax and that makes a huge difference,” says site selection consultant Deane Foote. Still, this fall, a margin tax initiative imposing a two percent revenue tax comes to a vote, which “a lot of business owners will watch carefully,” says Mike PeQueen, principal of Hightower Advisors in Las Vegas. Nevada spends at least $33.4 million per year on incentive programs, predominantly sales tax refunds, exemptions and other discounts, according to The New York Times. New legislation allocates incentives to movie production, targeting Southern California’s cluster.