For the seventh year in a row, CEOs rate Texas as the #1 state in which to do business and California as the worst. North Carolina maintained its #2 rank, while Florida rose three positions to the #3 spot. Tennessee fell one slot from last year to #4 while Georgia climbed two positions to claim the #5 rank.
Chief Executive magazine’s annual “Best & Worst States” survey takes the pulse of CEOs on business conditions around the nation. For the 2011 survey, 550 CEOs from across the country evaluated the states on a broad range of issues, including regulations, tax policies, workforce quality, education resources, quality of living and infrastructure.
“A handful of states have made business-friendly policies a priority,” says J.P. Donlon, Editor-in-Chief ofChief Executive magazine and ChiefExecutive.net. “These forward-thinking states are the exception rather than the rule and include Utah, Arizona, Florida, Tennessee, Louisiana, Texas and Oklahoma.”
CEOs voted California as the worst state in 2011, with New York, Illinois, New Jersey and Michiganrounding out the bottom five.
“ABC — Anywhere But California,” said T.J. Rodgers, CEO of Cypress Semiconductor, a $668 million chip maker headquartered in San Jose, California, and with plants in 10 countries. “It’s expensive, it’s hostile to business, and environmental regulations are more of a drag on business than protecting the environment.” Cypress Semiconductor’s headcount in California peaked at 1,500. It’s now down to about 600.
With finances in shambles due to the weak economy, many states have been increasing tax rates.
“Today’s ‘soak the rich’ mentality hits business leaders especially hard,” says Marshall Cooper, CEO ofChief Executive magazine and ChiefExecutive.net. “CEOs and entrepreneurs vote with their feet — and also pack up jobs and investment with them when they leave.”
It’s interesting that North Carolina, which has one of the highest tax rates in the Southeast, maintains its number two position, largely due to the talent available through its eduction system and its quality of life. It’s education system is about to take a huge cut as the state wrestles with the same type of budget deficit that plagues other states.
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Georgia’s rise is also interesting. Another recent report noted that Georgia is right at the top when it comes to startup activitity, with more than 500 businesses a month launching.