Chief Executive Magazine Best Worst States for Business ... · States, Worst States” list in 2011 and 2012. State has recovered only one-third of jobs lost in 2000s. State and local

Chief Executive MagazineBest & Worst States for Business

2012 Rankings & Ratings

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Best States for Business2012 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


Biggest Gains from 2008

2012 Rank State 2008 Rank Change

13 Louisiana 45 + 32

20 Wisconsin 43 + 23

30 Mississippi 44 + 14

16 Wyoming 25 + 9

2 Florida 10 + 8


What is Competitiveness?

Competitiveness is the productivity with which a state utilizes its human, capital, and natural endowments to create value

Productivity determines wages, jobs, and the standard of living

It is not what fields a state competes in that determines its prosperity, but how productively it competes

--Michael Porter, Harvard Business School


Where Does Productivity Come From? Businesses and government play different but interrelated roles in creating a productive economy

Only businesses can create jobs and wealth

States compete to offer the most productive environment for business



How Should States Compete for Investment? Tactical (Zero Sum Competition) Strategic (Positive Sum Competition) Focus on attracting new investments Compete for every plant Offer generalized tax breaks Government drives investment attraction Also support greater local investment by existing companies Reinforce areas of specialization and emerging cluster strength Provide state support for training, infrastructure, and institutions with

enduring benefits Improve the efficiency of doing business Harness efficiencies and coordination across jurisdictions, especially with

neighbors Government and the private sector collaborate to build cluster strength



How Wisconsin ComparesWisconsin Michigan Indiana

Major pluses

Overhauled pensions and union rules for government workers, including restrictions on monopoly unionism. Passed law requiring two-thirds supermajority of both chambers to raise income, sales or franchise tax rates. Jumped from No. 41 to No. 24 in Chief Executive “Best States, Worst States” list in 2011 and then rose to No. 20 in 2012. Walker graded “B” in Cato Institute 2012 report card on governors.

Vanquished Michigan Business Tax. Corporate taxes now ranked No. 7 by Tax Foundation, a 40-spot improvement over 2011. Snyder graded “B” in Cato Institute 2012 report card on governors. Ranked No. 12 on Tax Foundation’s business-tax climate list.

Became 23rd right-to-work state in 2011. Cut corporate-tax rate by 25 percent. Ranked No. 6 in Chief Executive “Best States, Worst States” list in 2011 and nudged up to No. 5 in 2012. Daniels graded “B” in Cato Institute 2012 report card on governors. State and local tax burden ranked No. 25 in nation at 9.5 percent by Tax Foundation.

Major minuses

State and local tax burden ranked as fourth-worst in nation at 11 percent by Tax Foundation. Ranked No. 43 on Tax Foundation’s business-tax climate list.

Stayed at No. 46 in Chief Executive “Best States, Worst States” list in 2011 and 2012. State has recovered only one-third of jobs lost in 2000s. State and local tax burden ranked as 12th-worst in nation at 9.7 percent by Tax Foundation.

Daniels made 2011 tax package, including big corporate-tax rate cut, revenue neutral with offsetting tax increases. Unemployment-insurance taxes increased significantly in 2011. Great Recession ravaged crucial recreational-vehicle manufacturing base in northern Indiana. Has very limited access to Great Lakes.

Biggest-employment

industries

Printing, paper product manufacturing, foundries, dairy-product manufacturing, electrical-equipment manufacturing.

Motor vehicle and parts manufacturing, metalworking machinery manufacturing, office-furniture manufacturing.

Motor vehicle and parts manufacturing, iron and steel mills, foundries, powertrain manufacturing.

Sources: Bureau of Labor Statistics; Economic Modeling; Tax Foundation; Cato Institute, Chief Executive.


The ITR Opportunity Index

Source: ITR Economics


Wisconsin is moving in the right direction

2024

4143 43

3329

8

4042 46 45 48 48

38

17

22

32 3129

36

2006 2007 2008 2009 2010 2011 2012

State Ranks Over TimeWisconsin Illinois Minnesota

* A rank of #1 means the best state for business, #50 means the worst.

WORSE

BETTE

R


State Ratings

0 2 4 6 8 10

California

Wisconsin

Minnesota

Illinois

Texas

Avg. State

1.74

5.56

3.82

2.31

8.58

5.68

Taxation & Regulation


State Ratings

0 2 4 6 8 10

California

Wisconsin

Minnesota

Illinois

Texas

Avg. State

5.82

7.48

7.14

5.84

8.05

6.68

Workforce Quality


State Ratings

0 2 4 6 8 10

California

Wisconsin

Minnesota

Illinois

Texas

Avg. State

6.73

7.27

6.57

5.11

7.94

6.78

Living Environment


Wisconsin Ratings Taxation & Regulation: 5.56 Workforce Quality: 7.48 Living Environment: 7.27

Development Trend Indicator Direction: Up New conservative statehouse is shaking things up, drawing business favor.

State GDP % Growth 2007‐2010: ‐1.45 % Growth vs. Nat'l Avg. (‐0.33%) ‐1.11


Wisconsin Unemployment (as of 12/2011) Unemployment Rate % 7.10 Comparison w/ Nat'l Rate (8.50%) ‐1.40

Domestic Migration Domestic Net Migration (2000‐2009) ‐11,981 Rank 30

State Government Debt Per Capita Fiscal Year 2010

$3,929 Gov't Employees per 10,000 Residents 503.04

State‐Local Tax Burden Rate 10.98% Compared to National Average (9.8%) +1.18


US Manufacturing as a % of GDP(Value Added)

10

12

14

16

18

10

12

14

16

18

'88 '90 '92 '94 '96 '98 '00 '02 '04 '06 '08 '10 '12 '14

3MMA

11.0%

12.2%



U.S. Dependence on Foreign Oil DecliningNet imports as a share of domestic consumption16

52%49%

45%

57%58%60%60%



Deloitte Recommendations to Improve Wisconsin’s Economy Raise the quality of the state’s workforce and infrastructure

Build industry clusters in key sectors, including food processing, advanced manufacturing, medical products and services

Increase investment in research and development throughout the state, particularly leveraging innovation in traditional Wisconsin industries

Encourage a culture of entrepreneurship, venture capital and startup activity

Facilitate technology transfer and harness resources at Wisconsin colleges and universities

Reduce health‐care costs and taxes on businesses and individuals in the state

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Documents

Chief Executive Magazine Best Worst States for Business ... · States, Worst States” list in 2011 and 2012. State has recovered only one-third of jobs lost in 2000s. State and local