A significant majority of California business owners have a negative outlook on the economy of the nation’s most populous state, according to a recent survey conducted by Small Business California, a non-partisan business advocacy organization.

In the March survey, 84% of respondents described the Golden State’s business climate as fair to poor. More than half of the 430 people polled, most of whom are presidents of their companies, said that California is generally headed in the wrong direction.

Echoing a number of national small-business surveys, the availability and rising cost of health care emerged as the top concern, with 91% describing it as a high priority. Other major issues included:

  • The workers’ compensation system (83%)
  • The quality of public education (78%)
  • Repairing and enhancing the state’s infrastructure (73%)
  • Too much regulation of small businesses (67%)

"The [concern over] infrastructure literally came out of nowhere, said Scott Hauge, president and founder of Small Business California, which is based in San Francisco. "We didn't even ask the question last year."

Hauge attributed the newfound concern to Hurricane Katrina, which served as a wakeup call for Californians. Gov. Arnold Schwarzenegger recently proposed a $222.6 billion public-works program, which includes bridge and levee projects.

The survey also showed that small businesses in California are having a tough time finding a skilled workforce. When asked which higher education institution provides better job-training skills for the needs of their companies, 26% said community and technical colleges, while 15% said four year colleges and universities.

"When I talk to auto mechanics, they say they can't find anyone to hire," Hauge said. Almost half of the respondents said they favor expanding opportunities for vocational and technical training.