Are California businesses overregulated?

"For decades, business leaders have complained that California's regulatory climate has overburdened companies across the state, blaming a morass of rules, permits and paperwork for pushing businesses and jobs out of state and holding back economic growth. To help measure the impact of the regulations, the Public Policy Institute of California, a nonprofit, nonpartisan think tank, sought to compare the number of business requirements in the state with those in other parts of the country."

"In a new report, researchers with the PPIC found that while California is not an outlier nationwide when it comes to state and local business regulations, it has by far the most specific constraints on businesses - defined as regulations containing the words "shall," "must," "may not," "required" and "prohibited." The researchers found that states with more of these types of strict regulations - ranging from environmental standards to consumer safety protections - tend to see fewer new businesses forming, though the report stopped short of establishing a definitive causal relationship."

"We were actually kind of surprised to find that California has around the same number of regulations, broadly speaking, about 1,300 that relate to businesses. It's in the middle of the pack across U.S. states, even though we're perceived as having much more regulation than other states."

California has roughly 1,300 business-related regulations, a level similar to many other states. California's regulations include substantially more specific constraints and prohibitions—identified by words such as "shall," "must," "may not," "required," and "prohibited"—amounting to over 420,000 specific constraints. States with more of these detailed, strict requirements, spanning environmental standards to consumer safety protections, tend to experience fewer new business formations. The pattern shows a correlation between regulation specificity and reduced business startups, but the relationship observed does not establish definitive causation.

Read at The Mercury News