The Ten Worst States for Business in 2014
CHICAGO-(September 23, 2014) - "Will voters again be blinded by negative TV ads and keep state politicians who have proven they do not perform? Unfortunately, the answer is very likely 'yes'," says Dr. Ronald R. Pollina, Chairman of the American Economic Development Institute (AEDI) and President of Pollina Corporate Real Estate, Inc.
The original study, recognized as the "Gold Standard" for evaluating the pro-business status of each state, also provided the most comprehensive analysis of the worst states for business because it contained the exact same data for all 50 states.
The AEDI/Pollina Corporate study examines 32 factors over which state governments have control relative to efforts to be pro-business. The report uses a two-stage process. Stage I, Labor, Taxes, and Other Factors, evaluates 19 factors including taxes, human resources, right-to-work legislation, energy cost, infrastructure, worker compensation legislation, and jobs gained or lost. Stage II, Incentives and State Economic Development Agency Factors examines 13 additional factors, including incentive programs, state economic development department evaluations and marketing.
If consistency counts, then the states that ranked as the Ten Worst States for Business in the AEDI/Pollina Corporate study deserve to be given awards.California has been rankedamong the worst ten states ten out of the last eleven years. Massachusetts #41, Wisconsin #46, New Jersey #47, Rhode Island #48 and California #50 have all ranked among the Ten Worst States for Business over the last five years. Vermont #42 and Illinois #49 have been in the bottom ten for the last four years.
2014 - Pro-Business 50-State Ranking
Worst State Rank
|
State
|
Governor
|
Took Office
|
Legislative
Control
|
Unemployment Rate
& Rank
|
50
|
CA
|
Jerry Brown (D)
|
2011
|
D
|
7.4% 44
|
49
|
IL
|
Pat Quinn (D)
|
2009
|
D
|
6.8% 39
|
48
|
RI
|
Lincoln Chafee (D)
|
2011
|
D
|
7.7% 48
|
47
|
NJ
|
Chris Christie (R)
|
2010
|
D
|
6.5% 32
|
46
|
WI
|
Scott Walker (R)
|
2011
|
R
|
5.8% 25
|
45
|
WV
|
Earl Ray Tomblin (D)
|
2010
|
D
|
6.3% 31
|
44
|
ME
|
Paul LePage (R)
|
2011
|
D
|
5.5% 19
|
43
|
CT
|
Dannel Malloy (D)
|
2011
|
D
|
6.6% 36
|
42
|
VT
|
Peter Shumlin (D)
|
2011
|
D
|
3.7% 4
|
41
|
MA
|
Deval Patrick (D)
|
2007
|
D
|
5.6% 20
|
The governors in these states cannot be held solely responsible for their state's poor ranking. Each has held office for at least one term, giving them time to turn things around; however, a governor must have a supportive legislature to be successful. Even in the cases of a governor and legislature controlled by the same political party, as is the case in all but two states, failure persists. Only Maine #44 and New Jersey #47 have separate parties controlling the executive office and legislature.
Democratic governors (seven) dominate this list of the Ten Worst States, with the exception of those in Maine, New Jersey, and Wisconsin.
States That Have Shown Greatest Drop in Rank
The states that have shown the greatest drop in rank over the last three years were determined by looking at the results of three years. Consequently, we eliminated states that might receive a one-time drop due to the deletion of a single program or increase in taxes. Examining three years of results also provides more of a consistent pattern over time and among multiple factors that resulted in a steady and consistent drop in rank. We set the standard high - a state would have to move down in rank a minimum of ten places or 20 percent over the three-year period.
We felt that these states, whose business climates are not keeping pace with their peers, deserve special notice so that their leadership can make appropriate corrections:
Greatest Three-Year Drop in Rank
State
|
Rank and Change
|
Governor
|
Took Office
|
Legislature
|
Unemployed and Rank
|
OK
|
#20 10
|
Mary Fallon
|
2011
|
R
|
4.6% 11
|
NM
|
#35 10
|
Susana Martinez
|
2011
|
D
|
6.6% 36
|
Just being Republican does not automatically grant you status as a pro-business guru. Of the bottom ten ranked states, three are run by Republicans including New Jersey Governor Chris Christie and Wisconsin's Scott Walker, two darlings of their Party.
New Jersey ranks #47 but ranked #45 when Governor Christie took office in 2010. Wisconsin ranks #46 but ranked #44 when Governor Walker took office in 2011. Unemployment for New Jersey is 6.5 percent ranked a weak 32nd,, and Wisconsin has an unemployment rate of 5.8 percent ranked a more respectable 25th nationally. Governors Christie and Walker have worked at containing cost, but a job creation strategy has eluded them. Until jobs can be created along with the resulting tax revenue, cost containment will remain an unending journey without a pleasant destination. Job creation is dependent on the creation of a pro-business environment.
Hostile Business Environment: A Perfect Storm for Economic Disaster
What don't the governors and legislators of the Ten Worst States for Business understand about the fact that a hostile business environment creates the perfect storm for budget deficits, service cuts, unemployment and poverty? A hostile business environment creates high unemployment that results in lower tax revenues, resulting in high state deficits and cuts in services. High rates of unemployment push more families from the middle-class to the lower-class and into poverty.
Breaking this cycle should be priority one, but it does not appear the message is getting through to politicians in capitals of bottom ranked states. Will they pay a price for their indifference to job creation after voters go to the polls in November?
Media Contact:
Frank Martin
773-462-4144
martin.f@brandandimage.net