Vermont again ranks near bottom of Forbes list of 'Best States for Business'

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Vermont again ranks near bottom of Forbes list of 'Best States for Business'

Mon, 10/18/2010 - 6:59am -- tim

Forbes magazine released its annual report on the Best States for Business and Vermont, once again, was near the bottom. What little good news one could take from this is that the state actually rose two spots to 45th. Utah took over number one from longtime leader Virginia. 
Vermont was especially punished in the categories of business costs, regulation and growth prospects. The state's best categories were labor force (16) and quality of life (15). The latter seems to be somewhat of a head scratcher, perhaps, as states like New Jersey and Pennsylvania finished well ahead of Vermont, even though the description says it measured schools, health, crime, cost of living and poverty rates and that several other national rankings put Vermont near or at the top of states with the highest quality of life.
The business cost index was based on cost of labor, energy and taxes; the labor index measured educational attainment, net migration and projected population growth; the regulation index measured regulatory and tort climate, incentives, government integrity, transportation and bond ratings; the economic climate index measured job, income and gross state product growth as well as unemployment and presence of big companies; and the growth prospects category measured projected job, income and gross state product growth as well as business openings/closings and venture capital investments.
While Vermont is struggling with population and business growth, and has the reputation of being highly regulated, all damning qualities in this ranking, the overall rankings show imbalance. For instance, California (39 in 2010, 38 in 2009) and Florida (26 and 18), with their dismal economies that have been a drag on the US economy as a whole, do not seem nearly low enough. Oregon (6 and 10) has one of the highest unemployment rates in the nation at 10.6 percent. This is a full point higher than the US rate and 4.6 points higher than Vermont's rate.
While it would be easy to write-off the Forbes ranking as partisan ‘ as the magazine is steeped in Republican politics and its CEO has twice run for president ‘ the list is not a knee-jerk homage to the blue-state, red-state paradigm. The top state, Utah, is perhaps the most Republican state in the nation. But all the next five states in the ranking voted for Barack Obama in the last presidential election.
What seems to be the most common themes in what Forbes calls "fostering growth" amongst the states, with Western and Southern states generally fairing better, are easier regulation and cheaper energy. The top New England states are Massachusetts (16 and 34) and New Hampshire (19 and 19), which are the only two in the top half.
Utah looks like a clear winner by most measures. Utah's economy has expanded 3.5 percent annually over the past five years, faster than any other state except North Dakota. This is three-and-a-half times faster than the US as a whole. Total employment in the US has shrunk over the past five years, but in Utah it increased 1.5 percent annually, fourth-best in the nation. Its unemployment rate is 7.4 percent. Household incomes have surged 5 percent annually, which is tops in the country and twice as fast as the national average. 
Rank 2010, Rank 2009, State, Costs, Labor, Regulation, Climate, Growth, Quality

 

1
3
Utah
8
5
6
1
20
18

2
1
Virginia
24
3
2
4
14
6

3
5
North Carolina
3
15
3
18
9
32

4
4
Colorado
33
1
15
6
6
9

5
2
Washington
28
2
5
11
4
29

6
10
Oregon
18
4
34
14
12
21

7
8
Texas
26
21
17
2
1
38

8
6
Georgia
31
7
1
30
7
35

9
9
Nebraska
6
23
28
12
40
14

10
15
Kansas
23
18
11
13
30
27

11
7
North Dakota
4
37
25
3
33
23

12
11
Idaho
17
19
29
20
19
20

13
14
Iowa
7
40
19
17
39
13

14
12
Maryland
49
8
9
19
29
8

15
17
Minnesota
30
8
32
37
13
4

16
34
Massachusetts
50
10
13
22
28
1

17
16
South Dakota
1
32
37
5
46
25

18
29
Missouri
15
39
7
26
36
26

19
19
New Hampshire
40
6
47
32
5
2

20
21
Delaware
12
13
31
47
16
36

21
32
New York
43
29
23
9
22
11

22
23
Tennessee
10
38
4
44
23
43

23
36
Arizona
36
12
38
15
7
37

24
13
Montana
19
11
40
10
42
34

25
28
Alabama
21
42
10
29
10
46

26
18
Florida
37
14
22
36
3
39

27
22
Wyoming
2
24
49
8
48
31

28
31
Nevada
13
27
33
24
17
47

29
30
Indiana
10
43
16
48
32
19

30
33
Pennsylvania
34
34
21
16
43
7

31
43
Kentucky
8
45
26
40
15
33

32
26
Arkansas
14
44
24
25
21
44

33
20
Oklahoma
16
41
20
7
50
41

34
25
South Carolina
26
28
8
43
26
45

35
27
New Mexico
22
32
35
31
2
49

36
35
Connecticut
45
17
39
23
35
3

37
24
Illinois
39
30
18
34
38
24

38
37
Ohio
32
47
12
46
37
12

39
38
California
44
25
43
28
11
22

40
45
New Jersey
46
20
41
33
33
5

41
46
West Virginia
5
48
46
38
23
40

42
42
Alaska
29
31
42
27
27
42

43
48
Wisconsin
35
36
36
34
47
10

44
44
Louisiana
25
50
27
41
18
50

45
47
Vermont
42
16
45
39
45
15

46
39
Hawaii
47
21
44
21
41
28

47
49
Michigan
38
46
14
42
49
30

48
40
Mississippi
20
49
30
49
31
48

49
50
Rhode Island
41
34
50
50
23
17

50
41
Maine
47
26
48
45
44
16

 
 
 
1 Index based on cost of labor, energy and taxes. 
2 Measures educational attainment, net migration and projected population growth. 
3 Measures regulatory and tort climate, incentives, government integrity, transportation and bond ratings. 
4 Reflects job, income and gross state product growth as well as unemployment and presence of big companies. 
5 Reflects projected job, income and gross state product growth as well as business openings/closings and venture capital investments. 
6 Index of schools, health, crime, cost of living and poverty rates
Sources: Moody's Economy.com; Pollina Corporate Real Estate; Pacific Research Institute; Tax Foundation; Sperling's Best Places; Better Government Association; Census Bureau; SBA; FBI; Dept. of Education; Forbes. 
Source: Forbes. http://www.forbes.com/2010/10/13/best-states-for-business-business-beltw...