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The best and worst states for business

Chief Executive says housing is a key metric

The Chief Executive annual survey of more than 500 CEOs nationwide has once again named Texas as the best state for doing business for 10 years running.

Every year Chief Executive surveys CEOs for the best and worst states for doing business. CEOs are asked about the tax and regulatory regime, the quality of the workforce, living environment and affordable housing.

The Lone Star State continues its 10-year historical position as the best state overall; but Florida, which ranks No. 2, is edging up and even overtaking Texas in its quality of living environment.

“We’ve learned from Texas how to tell our story better and it helps that we’ve cut taxes 25 times—about $400 million,” Florida Governor Rick Scott told Chief Executive.  “When companies like Hertz, Amazon, Deutsche Bank and Verizon add jobs here, it causes more people to look at us. Business is comfortable that we’ll keep the tax base low and improve our workforce.”

Texas recently scored huge with the relocation of Toyota's North American headquarters from California to Plano, Texas, a suburb of Dallas-Fort Worth. Texas won another bragging right last February when Site Selection magazine reported that it surpassed California in global technology exports in 2012.

For the list of the 10 best and 3 worst states for doing business, click below.

The list of the best states for doing business.

  1. Texas
  2. Florida
  3. Tennessee
  4. North Carolina
  5. South Carolina
  6. Indiana
  7. Arizona
  8. Nevada
  9. Louisiana
  10. Wisconsin

Tennessee edged out North Carolina to take third place with North and South Carolina respectively capturing 4th and 5th place. Indiana, Arizona and Nevada finished 6th through 8th, respectively.

Having jumped 31 positions from 40th in 2010 to No. 9 this year, Louisiana is the Cinderella state of Chief Executive’s ranking, proving that a concerted effort to transform old habits and policies can truly pay off.

Wisconsin comes close with a meteoric thrust from 41st five years ago to 14th in 2014. Having survived a bitter recall last year, Wisconsin Governor Scott Walker recently signed Senate Bill 1, legislation that provides $504 million in tax relief over the next two years to state taxpayers. The bill reduces income- and property-tax rates, as well as eliminates income-tax rates for manufacturers, making the Badger state even more competitive.

Likewise, Ohio has seen dramatic improvement due, in part, to an energetic governor in former congressman John Kasich, who, like Walker, pushed a vigorous turnaround. During his tenure, Ohio became the No. 5 job creator in the nation and No. 1 in the Midwest. Unemployment is now 6.5 percent, the lowest in Ohio since June of 2008. Likewise, Ohio has gone from an $8 billion deficit to a $1.5 billion surplus over the same period.

The three worst states for businesses.

  1. California
  2. New York
  3. Illinois

California, New York and Illinois continue to rank among the worst three states in 2014, with virtually no change from previous years.

As Chief Executive put it so well, California exchanged acute problems for merely chronic ones. Despite being home to Silicon Valley (not the HBO series) universities, open spaces and natural beauty, California is not kind to business.

As Chief Executive notes, the Golden State continues high personal income tax rates and regulates with a very heavy hand. Its top, marginal tax rate of 33% is the third-highest tax rate in the industrialized world, behind only Denmark and France.

Most damning to HousingWire readers, California’s real estate is simply too expensive; and because its taxes are higher, general costs of living are higher. As a result, wages have to be higher, as well. The state is also known for policing companies more heavily than just about any other state—and sometimes more than the federal government.

“California likes to say that Texas can have all those low-wage jobs,” says Richard Fisher, CEO of the Dallas Federal Reserve, “but from 2000 to 2012, job growth percentage change by wage quartile was better in Texas.”

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