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2013 Best and Worst States for Business
JP Donlon / May 6, 2013
In its ninth annual survey of CEO opinion about the best and worst states in which to do business, 736 CEOs—the highest response on record—rendered their verdict. Business leaders were asked to grade states with which they are familiar on a variety of competitive metrics that CEOs themselves regard as critical. These include: 1) taxation and regulation; 2) quality of workforce; and 3) living environment. The tax and regulatory grade includes a measure of how CEOs grade a state’s attitude toward business, a key indicator.
In the minds of most leaders, a state’s friendliness is closely aligned with its tax and regulatory regime. Similarly, workforce quality also measures the perceived cooperativeness of workers with management, as well as the people’s general work ethic and education attainment. The living environment metric measures the perceived quality of education and public health facilities, as well as the affordability and quality of real estate, the transportation system and related environmental factors.
For the ninth consecutive year, the Lone Star state continues to rank first, with the Golden State continuing to rank dead last. Florida, North Carolina, Tennessee and Indiana place second through fifth respectively—unchanged from last year’s ranking—while Arizona elbows its way into sixth place, up from 10th place in 2012. Virginia and South Carolina follow, with Nevada moving into a solid ninth place up from 12th in 2012. The most dramatic ranking change was scored by Ohio, which moved up 13 places, and by Delaware, which dropped 13 places. Louisiana, Wisconsin, Kansas, Montana and Minnesota also advanced in the rankings since 2012.
Simply put, “a good state is one that understands the private sector pays for the public sector and makes it easy for the private sector to conduct business and grow,”remarks David N. Willis, CEO of CRW Parts, a Baltimore wholesale distribution firm. “California, New York and Illinois have high costs of living, high taxes and high regulation,” says Mark Larsen, CEO of Maxxcap Group, a mid-size financial services firm. Additionally, each of these states makes it difficult, and often worse, than other places to do business. By contrast, “states like Texas and Ohio are consistently trying to help us grow our business and are listening to the leaders of companies to help solve problems,” says Toledo-based Impact Products CEO Terry Neal.