From The Center Square:
CEO magazine: Texas, Florida best states for business; California, New York, Illinois the worst
Tennessee, North Carolina and Indiana also among top 5 states; New York, Illinois, New Jersey and Washington near bottom
- Bethany Blankley | The Center Square contributor
(The Center Square) – For the 17th year in a row, Texas was named the “Best State for Business” by the nation’s leading CEOs in an annual survey conducted by Chief Executive Magazine. Once again, California was ranked the worst.
The rankings are determined by CEO’s assessment of each state’s business climate, workforce, and quality of life.
Texas has ranked first every year for 17 years since the magazine first began its assessment.
Florida ranked second, with Tennessee, North Carolina and Indiana, rounding out the top five.
California, New York, Illinois, New Jersey and Washington ranked in the bottom five.
The bottom ranking states are “the usual bunch,” the magazine states.
“Despite powerful human capital, high costs remain a turnoff” for businesses.
“When it comes to the three criteria CEOs tell us they value most in site selection – tax policy (37 percent rank it first), regulatory climate (35 percent) and talent availability (25 percent) – Texas and Florida outclass all comers,” the magazine reports.
Of the CEOs surveyed, 44% said they’re “more open than before to examining new locations” for their business, while 34% said they’re “considering shifting [or] opening significant operations [or] facilities in a new state.”
“In a world of remote work, reshuffled markets and flat-out rethinking of nearly every aspect of business, the hearts and minds of CEOs are very much up for grabs,” the magazine reports.
One of the drawbacks of Texas, CEOs said, was the colossal power outage the state suffered in February. Texas “suffered a serious reputational setback when its electricity grid failed,” the magazine says. “Texas emitted pure misery, images of frozen residents standing in lines for clean water amid one of the largest public infrastructure collapses in the nation’s history – one critics say was largely predictable and preventable.”
Josh Brumberger, CEO of Utilidata, a utility-software outfit based in Providence, Rhode Island, said that while Texas governmental leaders said “this is a blip they can fix,” Texas “should be leading with, ‘This was a colossal failure, and we own it, and here are the things we’re doing to fix it.’”
Of the ranking, Texas Gov. Greg Abbott said, “Texas continues to dominate as the Best State for Business because of the unmatched competitive advantages we offer: no corporate or personal income taxes, a predictable regulatory climate, and a young, growing, and skilled workforce.
“As we continue to unleash the full economic might of the Lone Star State, I look forward to welcoming even more innovative, job-creating businesses to Texas. When businesses succeed in Texas, Texans succeed.”
Texas, with no income tax, is the fastest growing state in the U.S. After the 2020 Census count, Texas gained an additional two congressional seats. Texas also leads the U.S. in total exports for 19 years, and tech exports for eight.
California’s ranking as the worst for business comes after corporate leaders have continued to announce they are relocating their headquarters or entire operations out of state. Citing high cost of living and one of the highest tax burdens in the country as the reason, the California Policy Center catalogued at least 50 large corporations that have left California since 2014, with the vast majority leaving in 2019 and 2020.
Tax revenue also leaves with the companies, employees and residents as they exit California, resulting in the state reporting a cumulative decrease in adjusted gross income between 2010 and 2018 of $24.6 billion.
Last year, for the first time in the state’s recorded history, California reported a population loss, according to Census Bureau data. As a result, according to the 2020 Census count, California lost a congressional seat for the first time in its history.