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Monday, May 20, 2024

L.A. County crippled by unfriendly attitude toward business

BizFed’s annual survey of over 100 leading business groups representing more than 250,000 businesses throughout L.A. County should be a wakeup call for Southern California leaders: The people working every day to grow the economy and create jobs think our region is unfriendly to businesses, and sadly they are less optimistic than ever about the region’s economic outlook. Fifty-two percent of business leaders who responded to our poll believe business conditions this year will be better than last. You might think that breaking the half way mark might be good until you look closer and realize that result is DOWN nine points from last year’s poll! Sixty percent singled out the city of Los Angeles as the “least business friendly” in the region. For the third year in a row, “taxes and fees” and “government regulation” top the survey as the business community’s highest-priority concerns. Open-ended comments on the survey included numerous comments about the slow and confusing bureaucracy businesses – including small “mom and pop” businesses – must navigate to receive permits, pay fees and ensure compliance with seemingly ever-changing local rules and regulations. Businesses in Los Angeles are treading water, and instead of throwing them a lifeline, government officials have continued to weigh them down with compounding taxes, fees and regulations. While states like Texas and Virginia compete to be ranked “best state for business” by Forbes, CNBC and others, L.A. County’s poor business climate makes us a lucrative target for those trying to lure away businesses and jobs. (Virginia’s Fairfax County Economic Development Authority even has a Los Angeles office that advertises on local radio here.) In fact, despite 76 percent of businesses surveyed being anchored in L.A. County, a whopping 80 percent say they have no plans to expand or grow in the county and 9 percent actually plan to leave the county. High taxes and excessive regulations were the most common reasons cited for businesses either not expanding in or planning to leave L.A. County. Far from the hopeful picture coming from Washington, Sacramento and Wall Street, the 2013 BizFed survey paints a picture of stagnation in which businesses are trying to squeeze new investments out of existing revenue. When it comes to hiring new workers, the survey found that just 30 percent plan to grow their workforce this year – down from 34 percent who felt that way the same time last year. While 48 percent said they plan to invest in durable goods this year, compared to 33 percent who said that last year, 92 percent say that it’s too difficult to access capital to make those investments. Compounding the uncertainty about being able to grow business operations here, the survey cited problems with education deficiencies resulting in the lack of a skilled workforce. And let’s not forget that most employers are scrambling to figure out how to manage through the plethora of health care law changes that will be enforced in a few short months. The good news is that, as the grassroots voice of the business community, we at BizFed have already made inroads with Mayor-elect Eric Garcetti, and we are working to educate elected leaders at all levels about how businesses really see the world. Between last November’s election, which brought L.A. County’s state delegation the largest freshman in years, and the May election, which brought a crop of new leaders to local governments throughout the region, we have a fresh opportunity to improve L.A. County’s business climate. Instead of letting ourselves be a juicy target for others trying to poach our most successful businesses, it’s time to make L.A. County the place people want to do business. Tracy Rafter, a resident of Sherman Oaks, is chief executive of BizFed, a Los Angeles advocacy group for an alliance of L.A. County business organizations.

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