SOURCE: Chief Executive Magazine
January 22, 2008 08:30 ET
CEOs Weigh in on Best, Worst States to Do Business
Texas, Nevada, North Carolina Top List as Best States; California, New York, Michigan Are the Worst
MONTVALE, NJ--(Marketwire - January 22, 2008) - While much of the nation's focus is jumping
from state to state during the presidential primary race, CEOs did their
own "state-jumping," ranking the best and worst states to do business. In
an annual polling by Chief Executive magazine, CEOs ranked the states with
no income tax as the top two states for business -- Texas and Nevada -- and
those highly-regulated states as the worst two -- California and New York.
These same states have been ranked as the best and worst two states to do
business in for the past three years.
Both the top third and worst third spots experienced a change this year.
North Carolina, replacing Florida, returned to the third place after coming
in fourth last year. Michigan, home of the struggling auto industry, took
the worst third state spot, replacing Massachusetts.
Chief Executive's fourth annual "Best & Worst States" survey was conducted
right after the New Year, and asked 605 top executives to evaluate their
states on a broad range of issues, including proximity to resources,
regulation, tax policies, education, quality of living and infrastructure.
Providing additional insight to the evaluations, CEOs were also asked to
grade each state based on the following criteria: 1) Taxation & Regulation,
2) Workforce Quality, and 3) Living Environment.
"Overall, the message CEOs are sending is that
over-taxed and over-regulated states are not conducive to the health of
their businesses," said Ed Kopko, CEO and Publisher, Chief Executive Group.
"This is the message they've been communicating since our poll started in
2005. However, in states like California and New York, where we are
increasingly facing a shrinking population, the message seems to have
fallen on deaf ears, as CEOs continue to be extremely frustrated with the
business-unfriendly practices in these states."
HIGHLIGHTS OF THE SURVEY
Texas: Texas scored strong in each of the three categories: It received an
"A-" in the Taxation & Regulation category and a "B+" in the other two
Voicing the positive sentiment of many respondents, Charles Hannabarger,
President and CEO of PSI Associates, said, "Texas has a strong economy with
a diversified economic base. The cost of living is low and the quality of
life is very good. The attitude and capabilities of the workforce are
Nevada, North Carolina: Nevada and North Carolina also performed strongly:
Nevada got an "A" for Taxation & Regulation, but received a "B-" in
Workforce Quality and a "B" for Living Environment.
North Carolina got a "B+" for Taxation & Regulation and Workforce Quality
and an "A-" for Living Environment.
Though very supportive of low taxes, CEOs criticized the status of the
education system in low tax states and called for improved public school
system and better infrastructure.
Florida: In an interesting twist, Florida, the third best state in last
year's polling, plummeted this year to the tenth best state on concerns
over its education system and workforce quality. Florida, which is widely
seen as an important stronghold in presidential hopeful Rudy Giuliani's
campaign for the White House, received a "B-" for Workforce Quality and a
"B+" in the other two categories.
General consensus among Florida CEOs was that the government should cut
income and property taxes. Additionally, CEOs called on the state
government to put in place programs that encourage more professionals to
move into the state and better educate the local talent.
California: California was ranked as the worst of all states to do
business. It received a "D" in Taxation & Regulation, and a "B-" in both
the Workforce Quality and Living Environment categories.
Voicing the sentiments of the majority of CEOs in California, John Keffala,
President of Forbes Business Plan Advisors, said, "California continues to
be a tough state to do business in." The main concerns cited by
California-based CEOs were high taxes, over regulation, illegal immigration
and cost of living.
New York: Notorious for onerous legislation and high taxes, New York scored
similarly to California in Taxation & Regulation category, receiving a "D,"
while getting a "B-" for the Workforce Quality and a "C-" for its Living
New York has additional significance this year, as main competitors for the
presidency from each party, Rudy Giuliani for the Republicans and Hillary
Clinton for the Democrats, are from the Empire State.
Similar to California, the majority of CEOs in New York called for lower
taxes, less regulation and less government spending as well as more
Additionally, CEOs were very vocal about their discontent with New York
Governor Eliot Spitzer, indicating that he had done nothing to improve
conditions for businesses in NY since he took office. Some CEOs went as
far to say that the "Governor is a liability" and "has a hostile image
Massachusetts: The home state of former Governor Mitt Romney, Republican
presidential hopeful, was ranked as the fourth worst state for business.
Like New York, Massachusetts got a "D" and a "B-" for Taxation & Regulation
and Workforce Quality, respectively. It performed relatively stronger than
New York in the Living Environment category, receiving a "C+."
Massachusetts-based CEOs, voicing similar sentiments as their counterparts
in the other two worst states, called for lower income taxes, bringing the
state's stance on social and civil policies closer to the center, as well
as more programs for small businesses.
For additional information regarding the confidence of public- and
private-company CEOs, visit our full report at
ABOUT CHIEF EXECUTIVE MAGAZINE
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published since 1977. It reaches 42,000 chief executive officers and their
peers, reaches a total readership of 228,000. Chief Executive Group
facilitates "Chief Executive of the Year," a prestigious honor bestowed
upon an outstanding corporate leader, nominated and selected by a group of
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for more information.
Best and Worst States for Business: January 2008
Best States Rank 2008 Rank 2007 Rank 2006
Texas 1st 1st 1st
Nevada 2nd 2nd 2nd
North Carolina 3rd 4th 3rd
Virginia 4th 9th 7th
Arizona 5th 5th 5th
Florida 10th 3rd 4th
Worst States Rank 2008 Rank 2007 Rank 2006
California 51st 51st 51st
New York 50th 50th 50th
Michigan 49th 47th 48th
Massachusetts 48th 49th 49th
New Jersey 47th 46th 46th
Biggest Gainers Positions Gained
Biggest Losers Positions Lost
New Mexico 13
State CEO Rank Growth Rank
Texas 1 15
Nevada 2 2
North Carolina 3 12
Virginia 4 10
Arizona 5 3
Tennesse 6 27
Georgia 7 25
Indiana 8 46
South Carolina 9 36
Florida 10 6
Delaware 11 13
Alabama 12 17
Colorado 13 16
New Hampshire 14 32
Utah 15 5
Idaho 16 1
Iowa 17 20
South Dakota 18 30
North Dakota 19 26
Missouri 20 44
Oklahoma 21 18
Minnesota 22 31
Montana 23 11
Kansas 24 29
Wyoming 25 40
Kentucky 26 37
Oregon 27 4
Nebraska 28 33
New Mexico 29 7
Washington 30 14
Alaska 31 39
Maryland 32 22
Rhode Island 33 43
Ohio 34 50
Maine 35 34
Vermont 36 28
Arkansas 37 23
Hawaii 38 8
Pennsylvania 39 48
District Of Columbia 40 19
West Virginia 41 47
Connecticut 42 24
Illinois 43 45
Wisconsin 44 42
Mississippi 45 49
Louisiana 46 38
New Jersey 47 41
Massachusetts 48 35
Michigan 49 51
New York 50 21
California 51 9