Chief Executive Magazine Rolls out this Year’s Big Winners and Losers in a Quest to Attract New Business
The 2014 ranking of Best and Worst US States for Business, as compiled by chiefexecutive.net, has just been released. These rankings result from surveys of more than 500 CEOs nationwide. Their responses are based upon what they consider to be the most favorable factors in starting or growing a business in their particular state. As you might expect, the primary considerations evaluated are favorable business and personal tax climates, as well as business-friendly regulations. Additional factors weigh heavily as well, including (among others) high educational standards, the availability of a quality workforce at all levels, affordable housing costs, and access to quality healthcare.
Some of this year’s most highly ranked states will come as no surprise, since they have held impressive positions for many years, but others have made quantum leaps ahead. All of these best-performing states seemingly have one thing in common: a governor and legislature who have a vision for growth, who have analyzed empirical data from sources such as How Money Walks and Wealth of States, and who are willing to take the bold steps necessary to achieve success.
Taking the top spot once again is the state of Texas. When it comes to attracting business, the state’s website says it all: “Texas is wide open for business.” Texas offers all of the prerequisites for its number-one position, including a strong economy, low taxes, a skilled workforce, an attractive quality of life, and a dynamic infrastructure. It can also boast the strong marketing prowess of Governor Rick Perry, whose forays into high-tax states have yielded significant gains in inward business migration.
Once again, in a strong second position, is the state of Florida. Florida has been nipping at Texas’ heels for quite some time, but that could all change next year. If all of the positive trending continues, Florida could finally capture that coveted number-one position. Florida has successfully recruited some big names to the Sunshine State, including the new Hertz Corporate headquarters, Amazon’s massive new fulfillment centers, as well as a significant number of new jobs from Verizon and Deutsche Bank expansions. It also helps that the governor has successfully cut taxes 25 times (for a total of about $400 million) and created an environment conducive to both business relocations and start-ups. In spite of all of his success, Governor Rick Scott faces a tough re-election bid in November against Charlie Crist, a former Republican Florida governor now running as a Democrat. If Scott does prevail in November, Florida has a good chance of taking the top spot, particularly since Perry cannot serve again due to term limits.
This year the State of Tennessee moved one place ahead of North Carolina for the number-three spot, followed in order by South Carolina, Indiana, Arizona and Nevada. In tenth position is Georgia, but I want to emphasize number nine. The ninth position is now held by the state of Louisiana; the Pelican State leads the pack in overall meteoric gains. Thanks to Governor Bobby Jindal’s hard drive for tax and policy reforms, the state has risen an astounding 31 positions, from 40th to 9th, since 2010.
While not yet in the top ten, other states are headed there quickly. After overcoming huge obstacles, including a contentious confrontation with public sector unions and a successful win in a recall election, Wisconsin Governor Scott Walker proved tenacious in spearheading tax breaks for businesses and individuals. Five years ago, Wisconsin sat in 41st position. Today, the state stands at number 14.
Ohio is yet another stellar performer. Under Governor John Kasich, and his aggressive tax and regulatory reform policies, Ohio has become the number-five job creator in the US, and number one in the Midwest. Ohio’s unemployment stands at 6.5 percent, and an $8 billion deficit has been replaced by a $1.5 billion surplus. All eyes are on the Buckeye State and its race to the top.
These states are the good news, but when it comes to the worst performers, the song remains the same. While California Governor Brown has succeeded in generating a budget surplus, with its high cost of living and unfriendly business environment, the state languishes at the bottom, along with New York and Illinois. Consider this: at 33 percent, California has the third highest marginal tax rate in the WORLD!
In January 2014 The Economist reported that, because of exhaustive permitting requirements and weighty regulations (some more stringent than those imposed by the federal government), it would take two years to open a restaurant in California. By comparison, it would take only six to eight weeks to do the same thing in Texas.
As we can see throughout the rankings, there are very diverse budgetary policies at play, but as Republicans are quick to point out, every single one of Chief Executive’s Best States for Business are led by Republican governors.