CFCE Blog

CFCE releases 2008 Business Climate Survey

By Loren Kaye
Posted 6/06/2008

CFCE recently released an opinion survey of business executives on the economy, business climate and state issues, including the budget.  We found that the economy, the state budget crisis, and quality of life issues are all weighing heavily on the minds of business owners.  On the other hand, we found that California companies remain optimistic about their ability to weather these challenging economic times and remain competitive in the future.  Survey and charts.

 

Attitudes on the Economy. 
Overall, the survey revealed that there is widespread pessimism about the state of the state and about the current economy.  Leaders are also pessimistic about economic recovery, but when asked about the state of their own businesses, respondents were far more optimistic. Only ten percent of executives believe that the economy will be better in one year, while 39% of executives believe their own situation will be better in one year. 

Biggest Disadvantages to Doing Business in California
The survey asked employers to assess the disadvantages of doing business in California.  Top of the list was too much government regulation, followed by the ability to hire and maintain a qualified work force, the high cost of health care, and high labor costs.

Advantages to Doing Business in California
Perhaps not surprisingly, public policies barely registered among business leaders when identifying advantages to doing business in California.  The top attributes of the state were climate, quality of life, access to large and lucrative markets, and culture of innovation/research and development.

Top Issues Leaders Should Address
California’s employers believe by a wide margin that the state budget deficit is most important issue to be addressed by state leaders, followed by the quality of public schools and higher education, economy and job creation, and energy and gas prices. 

Attitudes on the State Budget
Nearly all business leaders surveyed believe that the state budget situation is an extremely or very serious issue. Executives see spending as the primary culprit in creating the budget deficit, and spending cuts as the solution, with three times the number of executives indicating opposition to including tax increases as part of the solution as wish to see taxes as part of the mix. 

Budget Reforms
Executives’ top priority for budget reform is education reform, focused on student performance improvement and financial accountability.  Next is a balanced budget, whatever the mix of spending cuts and tax increases.  Other priorities were elimination of automatic COLAs and salary increases, and assurance that any tax increases would be temporary and broad based. 

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