Best and Worst States for Business in 2012

We are indebted to the folks at Chief Executive magazine for the following information.

In the magazine’s eighth annual survey of CEO opinion of best and worst States in which to do business, Texas easily clinched the No. 1 rank, for the eighth successive time. California earns the dubious honor of being ranked dead last, also for the eighth consecutive year.

This year, 650 business leaders responded to the annual survey. CEOs were asked to grade states in which they do business among a variety of areas, including tax and regulation, quality of workforce and living environment. The Lone Star State was given high marks foremost for its business-friendly tax and regulatory environment. But its workforce quality, second only to Utah’s, is also highly regarded.

Florida moved up from number three last year to number two. It is perhaps no coincidence that Texas and Florida have the highest net migration of people to their states from 2001 to 2009. By contrast, New York and California lost over 1.6 million and 1.5 million in net migration out of the states, respectively, over the same period.

North Carolina, Tennessee, Indiana, Virginia, South Carolina, Georgia and Utah held their positions in the top 10, with Indiana moving up a notch to fifth.

It may be no accident that most of the states in the top 20 are also right-to-work states, as labor force flexibility is highly sought after when a business seeks a location. Several economists, most notably Ohio State’s Richard Vedder and Harvard’s Robert Barro, have found that the economies in R-to-W areas grow faster than other states, have higher employment and attract more inward migration.

Although often eclipsed by Texas, its next door neighbor, Louisiana, is the Cinderella of business improvement. In 2006, it ranked 47th—where Massachusetts is today. And Katrina didn’t help matters. But since then it has climbed steadily up the ranks so that it is now 13th—up from 27th last year—the biggest leap in a single year of any state. “In Louisiana there is an active government push to reduce taxes and regulation and to encourage new industry to relocate to the state,” commented one chairman. “This was valuable for one of our companies, which decided to make the state our headquarters.” Other chiefs point to the big strides the state has made in workforce training and economic incentives. Its economic development office is also aggressive in luring disaffected businesses from the Northeast and California.

California’s enduring place of perpetual decline continues in this year’s ranking. Once the most attractive business environment, the Golden State appears to slip deeper into the ninth circle of business hell. The economy, which used to outperform the rest of the country, now substantially underperforms. And its status as the most ruinously contentious place to operate remains undisturbed in eight years. Its unemployment rate, at 10.9 percent, is higher than every other state except Nevada and Rhode Island. With 12 percent of America’s population, California has one-third of the nation’s welfare recipients.

Following is the complete list from ChiefExecutive.net.  You can click on each state for details.

What do you think?  Do you agree with this list?

2012 RANK	STATE	2011 RANK	1-YEAR CHANGE
1	Texas	1	0
2	Florida	3	1
3	North Carolina	2	-1
4	Tennessee	4	0
5	Indiana	6	1
6	Virginia	7	1
7	South Carolina	8	1
8	Georgia	5	-3
9	Utah	9	0
10	Arizona	13	3
11	Colorado	12	1
12	Nevada	10	-2
13	Louisiana	27	14
14	Delaware	16	2
15	North Dakota	21	6
16	Wyoming	14	-2
17	Oklahoma	11	-6
18	Idaho	19	1
19	South Dakota	15	-4
20	Wisconsin	24	4
21	Alabama	26	5
22	Iowa	22	0
23	Kansas	25	2
24	Missouri	23	-1
25	Kentucky	17	-8
26	New Hampshire	18	-8
27	Nebraska	20	-7
28	Montana	28	0
29	Arkansas	30	1
30	Mississippi	38	8
31	Alaska	31	0
32	Maine	36	4
33	New Mexico	32	-1
34	West Virginia	42	8
35	Ohio	41	6
36	Minnesota	29	-7
37	Washington	34	-3
38	Vermont	40	2
39	Rhode Island	35	-4
40	Maryland	37	-3
41	Hawaii	43	2
42	Oregon	33	-9
43	Pennsylvania	39	-4
44	Connecticut	44	0
45	New Jersey	47	2
46	Michigan	46	0
47	Massachusetts	45	-2
48	Illinois	48	0
49	New York	49	0
50	California	50	0