Chief Executive magazine released its annual survey of CEO opinions about the best states in America to do business — and the red states are on top.
States run by Republican governors — Texas, Florida, North Carolina, Tennessee, Indiana, Arizona, Virginia, South Carolina, Nevada and Georgia — claimed the top ten spots this year, unchanged from last year’s list. Meanwhile, Democrat-controlled Massachusetts, Illinois, New York and California ranked at the very bottom of the list. New Jersey, run by Republican Gov. Chris Christie, filled out the bottom five at #46.
The rankings are based on the survey responses of over 700 business chief executives who either have bases in that state or operations there. The metrics used included tax and regulatory atmosphere, quality of the workforce and living environment.
The most dramatic one-year jump in ranking occurred in Ohio, which climbed 13 spots to 22nd place. One CEO commented that Ohio “has made a dramatic turnaround under Republican leadership.” Republican Gov. John Kasich succeeded Democrat Ted Strickland in the 2010 mid-term elections. Democrat-controlled Delaware saw the most dramatic drop in ranking, dropping 13 spots to 27th place.
Several Republican governors used the respected survey as an opportunity to brag on behalf of their states. “This vote of confidence from business leaders across the nation further highlights that Texas is the epicenter for economic prosperity in this country,” said Texas Gov. Rick Perry in a press release. Fifty-two Fortune 500 companies are now based in Texas.
Wisconsin Gov. Scott Walker, whose state ascended from 41st place in 2010 to 17th place this year amidst several controversial public union reforms, boasted that “this three-year increase in ranking continues to show our economy is better off than it was a few years ago, and Wisconsin is on track to becoming one of America’s best states for business.”
Another Republican occasionally mentioned as a potential contender for the 2016 GOP Presidential nomination, Gov. Bobby Jindal, guided his state’s impressive 33-spot rise in the rankings since 2009. Louisiana ranked number 11 this year, its highest position ever.
What did CEOs say about bottom-ranked California, a state where Democrats have enjoyed a supermajority in the legislature?
“California is getting worse, if that is even possible,” bemoaned one CEO. “[I] am not aware of any businesses other than entertainment that will be expanding or moving into CA. It is a black hole,” observed another. The editors of Chief Executive piled-on, rating California’s development trend indicator as “negative,” noting that the “major income-tax hike in November hastens [the state’s] self-imposed economic decline.”
Chief Executive concluded that labor and tax policies were important drivers of States’ success in the survey. For example, the recent drive to enact “right-to-work” laws in many states has prompted corporate investment, according to the publication. “When . . . Indiana became a [right-to-work] state, Caterpillar announced that it would move its London, Ontario plant to Muncie,” observed the editors.
States without an income tax, or states such as Oklahoma and Kansas which have instituted recent tax-reforms, also fared particularly well in the rankings.
U.S. Supreme Court Justice Louis Brandeis famously referred to the states as “laboratories,” where citizens could “try novel social and economic experiments without risk to the rest of the country.” It seems clear liberal experimentation in California has failed, while conservative experimentation in Texas is a resounding success.
