States At The Bottom: Illinois And California

The two states that finished 49^th and 50^th in this year’s Chief Executive “Best and Worst States for Business” ranking:

Illinois

Excitement over Chicago’s being a potential finalist for Amazon’s “second headquarters” is only distracting attention from the state’s ongoing fiscal nightmare and unpopularity with most CEOs. And it doesn’t help that border states are increasingly poaching dissatisfied business owners and CEOs. Wisconsin just got a commitment from CEO and Founder Len Koren to move his Grayslake, Illinois, mold maker, International Mold and Production, north to the Badger State to supply the coming Foxconn complex. “I just shake my head at the burgeoning deficits and high taxes,” says Grant Thornton’s Michael McGuire, whose company is headquartered in Chicago. “You’ve got to run [Illinois] like a business and have a leader who will make tough calls.”

California 

The Golden State has accounted for about 20 percent of the nation’s economic growth since 2010, significantly more than its share of the population or overall output. The state finally has a multi-billion-dollar budget surplus. Crises in both electricity generation and water supplies have abated. That doesn’t mean its reputation among CEOs has improved. While the state attracts an outsize portion of entrepreneurs and VC financing, there are flies in the tanning lotion. High taxes, high costs and thickets of regulation remain turnoffs. The biggest problem is popping up at the grassroots level: Housing and other costs are so out of whack in the Bay Area (See “Where Talent Wants to Live,” p. 26) that it is losing skilled workers to other parts of the country.

The complete listing for the Best and Worst States for Business can be found here.