Since Proposition 13 in 1978 restricted property tax income, California’s local governments have increased their economic development activities, especially in the areas of land development and retail sales. Such measures have provoked criticism, but local officials say they have few alternatives. This paper presents a detailed survey of local economic development policies and activities. It includes assessments of their successes and failures by local officials. The results show that significant barriers to local economic activity exist, among them an inadequate state transportation infrastructure, high energy costs, and lack of an appropriately trained workforce.