California’s economy still has some cracks, but its strengths — including its diversity of industries — are starting to overshadow weaknesses such as the high cost of doing business in the state, according to speakers at the Milken Institute State of the State Conference 2011.

But if the state wants to reduce the revenue volatility for which it has become known, it has to take long-needed steps like enacting the kind of broad tax reform that was defeated during the legislative session, said Susan Kennedy, senior policy advisor for law firm Alston & Bird LLP and chief of staff to former Gov. Arnold Schwarzenegger.

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