There is a great dichotomy between the business climates in different US states, according to the recently released Pollina Corporate Top 10 Pro-Business States for 2013, co-published by Pollina Corporate Real Estate and the American Economic Development Institute (AEDI). The report said that while some states create a good environment in which businesses can operate, others do not.

“Companies looking to come to the US have misconceptions about where the good locations are,” said Dr Ronald R Pollina, chairman of AEDI and president of Pollina Corporate Real Estate. “We tell companies to take a harder look and first address their real needs.”

Advertisement

The top 10 states for pro-business leadership were Utah, Nebraska, North Dakota, Virginia, Wyoming, Kansas, Indiana, South Dakota, Missouri and Alabama. The study reasoned that in these states the governors and state legislatures exhibit a true understanding of the importance of producing the best business environment and the best opportunities for job growth and economic prosperity.

“All top ranked states should be held up as models for the other 40 states and the federal government,” said Mr Pollina.

The lowest ranking states for pro-business leadership were, in descending order, Maine, Minnesota, New Hampshire, Massachusetts, New Jersey, Vermont, Illinois, Wisconsin, California and Rhode Island. Three states – New Jersey, Rhode Island and California – have been ranked among the worst 10 states in this ranking for the past seven years, with California ranking bottom of the list every year between 2004 and 2012.

“In the US today, if you combine state, local and federal taxes, the tax burden on companies is among the highest in the world,” said Mr Pollina. “Add labour costs, and we are one of the costliest countries in which to do business. If US companies are going to survive in a global economy, they must be located in the most pro-business locations possible.”

Each year the study examines 32 factors relative to state pro-business efforts. It accepts no advertising and aims to be a comprehensive and impartial examination of states available. To determine the ranking, the study takes a comprehensive two-stage approach, first examining 19 factors, including taxes, human resources, right-to-work legislation, energy costs, infrastructure spending, worker compensation legislation and jobs lost or gained. It then looks at 13 state government-controlled factors, including state financial incentive programmes and state economic development department evaluations.