Life’s mysteries are not easy to figure out. I guess that’s why they’re called mysteries. We may never get a good answer on whether a “big bang” created the universe, why socks get lost in the dryer, or a complete list of those 11 herbs and spices.
But one “mystery” doesn’t seem so mysterious: How some states manage to succeed economically while some continuously struggle.
According to Forbes magazine, Utah is the “Best State for Business”, followed by North Dakota and North Carolina. Here’s the complete list. What are the criteria? Different tools measure it in different ways, but the methodology usually swirls around low taxes, economic climate, and low regulatory burden. Not complicated. CNBC publishes a similar list. Similar criteria, Utah is number three. One is Georgia, two is Texas. The non-profit Tax Foundation publishes a “Business Tax Climate Index”. Funny how the states with the better business tax structure are also present on the lists of states with the best economic prospects. You can see the similarities on this list, which is based upon sentiment toward economic outlook and is put together by Gallup.
Even those not disposed toward low taxes and low regulatory burdens seem to understand that these attributes lead to a healthier economic climate. Startup New York, the heavily advertised economic development message by the Empire State, promises relocating businesses will “pay no taxes for 10 years”. The brainchild of governor Mario Cuomo, the program recognizes the leverage available to states wooing business with an economic prosperity message. But they subvert the value of the mechanism by adding more restrictions than a Bill Clinton sleepover. I guess I don’t rise to their level of sophistication. If a business friendly environment creates opportunities in your state, and you recognize this sufficiently well to develop a slick advertising campaign, why wouldn’t you actually create the business friendly environment? New York is 49th on the Tax Foundation list, ahead of only neighboring New Jersey. Ironically, the restrictions have created considerably more business regulation. Like Lucy teeing up the football for Charlie Brown…you know the rest of the story. Read about the complications of the Startup New York program here.
Tip of the hat to Utah’s policymakers. Our fiscal discipline, educational tradition, light touch on the regulatory climate, and insightful community leaders have given us plenty of opportunity and a bright economic future.