California vs. New York as Nation’s Worst State

Whenever a free-market research or business group releases a “best and worst” list of states, my eye goes straight to the bottom: To see whether California is last or was edged out for the lowest rank by one of the other mismanaged liberal bastions. Illinois seems to exist to boost the self-esteem of Californians.

I can raise a glass of zinfandel to California’s great victory in the Mercatus Center’s recent “Freedom in the 50 States” study. The state didn’t place last. That distinction went to New York, thanks to its highest-in-the-nation tax rates and entrepreneur-crushing economic regulations. I owe an apology to residents of the Land of Lincoln.

For all the study’s detail about tax rates and regulation, this information jumps out as the most telling about New York: “9.0 percent of the state’s 2000 population, on net, left the state for another state between 2000 and 2011, the highest such figure in the nation.” Moving is the surest sign of dissatisfaction, especially when people relocate from a state that has long been an economic and cultural magnet.

Californians talk incessantly about high-tailing it to Texas or Nevada, yet New Yorkers flee at about double our rate. Migration numbers aside, I would still rank the Golden State as the Most Hopeless State. There are other studies that bolster that case, including Chief Executive magazine’s “2013 Best and Worst States for Business” that places California dead last, with New York in 49th place.

The magazine ranks states based on three categories: taxation and regulation, workforce quality, and living environment. Even with its natural advantages in the last category and high ranking in the second one, California still flopped because its officials have adopted a punitive environment in the first category. That takes some doing.

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