by Robert Maynard
An organization called the Chief Executive Group just released its 2013 rankings of the best states for business and Vermont came in at number 39, dropping from its ranking of 38 in 2012. This is how the group described what drives their efforts:
We believe that capitalism may be the most important factor in spreading human health and prosperity around the globe. By producing what people want and need in innovative ways, capitalists satisfy our everyday demands, create jobs, raise standards of living, extend lifespans and more.
CEOs are the cornerstones of the free enterprise system, and we help them do their jobs better to the benefit of their customers, employees, shareholders and themselves.
Here is their introduction to the 2013 ranking:
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.
The federal government may be a tax reform wasteland but the states are out there competing with gloves off. Nine states, including top-ranked places like Texas, Florida and Tennessee have no income tax. Oklahoma and Kansas have lowered theirs. Indiana Governor Mike Pence has called for a 10 percent cut. The governors of New Mexico, Nebraska and North Carolina have prioritized tax reform. Then there’s Louisiana’s Bobby Jindal, who wants to eliminate his state’s corporate tax and replace it by raising the state’s current 4 percent sales tax. Louisiana has come a long way since 2006 when it ranked 47th.
At a time when states are competing with each other to be more business friendly, Vermont cannot afford to be slipping. Vermont does have its strong points, but its tax and regulatory policies seem to be negating its strengths. In that category we only scored a one star ranking out of five. Here s how one CEO described our problem: “Vermont delivers more business uncertainty than the Federal Government. Business faces a single payer Healthcare system in 2014 that provides more uncertainty than Obamacare.” The group describes the federal government’s fiscal policies as “a tax reform wasteland,” but sees Vermont as worse than the feds. This does not bode well for our economic future.