Monday, May 16, 2011

Running To Stand Still

The good news? Minnesota moved from 31st to 29th place in the Best/Worst States for Business rankings by Chief Executive Magazine.

The bad news? Wisconsin went from 41st to 24th. Which means that Minnesota is now completely surrounded by states with a better climate for business (South Dakota #15, North Dakota #21, and Iowa #22).

Texas held the top spot for best state for business followed by North Carolina, Florida, Tennessee, and Georgia.

Meanwhile, the names at the bottom are hardly surprising:

But there has been some jockeying within the ranks. The Golden State was closely followed in the hall of shame by New York, Illinois, New Jersey and Michigan, with Illinois elbowing its way past New Jersey this year for the dubious distinction of third worst. Meanwhile, among the best states, Indiana jumped to sixth place from 16th in 2010, giving Hoosiers the third-biggest advance in the rankings in a single year.

Wisconsin and Louisiana posted the two biggest gains since 2010, with the latter, along with Oklahoma, also showing the biggest gains over the last five years. By proactively reshaping its posture toward business taxation and regulation, Louisiana has been quietly stealing pages from the Texas playbook.

By contrast, Illinois has dropped 40 places in five years and is now in a death spiral. Its bond ranking is 49th, ahead of only California. The state may play host to fugitive state senators from nearby Wisconsin and Indiana who avoid voting in their home legislatures, but businesses are heading for the exits. Doug Oberhelman, CEO of Peoria-based Caterpillar, is raising the specter of moving the heavy equipment maker out of Illinois. In a letter to Gov. Pat Quinn, he wrote, “The direction that this state is headed in is not favorable to business, and I’d like to work with you to change that.”

It's fascinating to see the labrotories of democracy in action as states make choices that determine their future prospects for economic growth, prosperity, and in some cases even long-term fiscal viability. Minnesota seems content with the status quo which means we'll likely see states that embrace reforming their business enviroment move past us toward the top while we continue to humor ourselves by saying that at least we're not Illinois.