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."

"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. But when you look closely within the text of regulations, California's regulations have a lot more specific constraints and prohibitions. That amounts to over 420,000 specific constraints."

California has about 1,300 business-related regulations, a count similar to many other states. California's regulations include a far larger number of specific constraints and prohibitions—exceeding 420,000 instances—typically signaled by wording such as shall, must, may not, required, and prohibited. States with higher counts of these strict, specific constraints tend to experience fewer new business formations, though a direct causal link has not been established. Longstanding complaints cite rules, permits, and paperwork as burdens that can push businesses and jobs out of state and impede economic growth. Specific constraints vary in applicability across industries and regions.

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