Yes, certainly. Do you think the quality of life rises when the government is less interventionist? See, e.g., all of American history. The only thing "loosening regulation" gets California citizens is directly worse lives (e.g., polluted waters and air, lower wages, more work hazards, more gouging, etc.). I mean, that question could literally be rephrased: Would strategically lowering taxes and making life worse for average Californians to attract businesses make California's quality of life drop?
As for taxes, because California is a state and, unlike the federal government, is revenue constrained, it has to collect money in order to spend money. So collecting less taxes means spending less money on education, health care, parks, and other infrastructure very important to the everyday lives of average Californians. The quality of life in California would be worse for the average Californian if California spent less money.
I would, however, be fine with turning California (and all other states) into administrative districts of the federal government. That way California wouldn't have to play this stupid game of collecting taxes at all. It'd also stop this stupid stunt of states having to "compete" for business. Such idiocy.
