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Tom Baxter

A roundup of state business rankings, and what they mean

By Tom Baxter

Imagine how it would be if we chose the best college football team the same way business rankings size up the states.

Suddenly the Crimson Tide would have a lot of company. One football ranking might give the greatest weight to the team which has scored the most points. Baylor might be No. 1 in that one, despite its loss to Oklahoma State over the weekend. Another might pay more attention to ranking the worst teams than the best ones, with Florida an upset possibility this year.

This alternate reality is worth keeping in mind when sizing up Nathan Deal’s campaign ad  touting the state’s No. 1 rating for its business climate.

“Now, for the first time in history, Georgia is the No. 1 place to do business,” the ad says.
Not to take anything away from the historical significance, but the ranking,  in Site Selection magazine, is designed to reflect the specialized point of view of its readers, those on one side or another of the corporate-state site selection game.

Georgia ranked fourth in a survey of corporate site selectors, which counted for 50 percent of the competition, but it did well enough to win overall with its scores in a grab bag of indexes of “competitiveness,” tax burden and current projects.

Generally speaking, Georgia does well in rankings like this, but this is the only one in which it’s tops. Chief Executive.net  puts Georgia in 10th place in its recent survey, with Texas in first place.

Forbes, which uses a bunch of analytical data to compile its annual list of “Best States for Business,” ranks Virginia the top state this year, and Georgia 10th. In its commentary, Forbes says Georgia’s “once robust economy has slowed in recent years, but the state still maintains a pro-business climate.” It notes the state’s 19 percent poverty rate as a drawback.

The poverty rate is also a problem for 24/7 Wall St.,  which puts Georgia all the way down at 34th in its ranking of the “Best and Worst Run States in America.” This site praises Georgia’s “strong fiscal management,” but questions the governor’s rejection of Medicaid expansion and a state-run insurance exchange when “comparatively few residents had health insurance coverage.”

In CNBC’s ranking, which is also quite detailed, Georgia ranks 8th overall, propelled by a No. 1 ranking in the “workforce” category. That could be another way of saying there are a lot of qualified people here who need a job: Arizona was 2nd and North Carolina 3rd in this category.

You’ll notice, if you browse the links, that North Dakota and South Dakota do very well in most of these surveys. What that says about the rankings is that hitting an enormous shale oil strike does wonders for your business competitiveness. Resource-rich states, states that can hold down taxes while relying on other revenues, have a big advantage over built-out, industrial states that have to tax to maintain their infrastructure.

If there’s any overall lesson for Georgians to derive from these surveys, it’s that the “quality of life” categories tend to drag us down, and might be the most in need of attention.
What these rankings really mean to the citizens of a state has been the subject of a lot of questions. In an analysis of the Tax Foundation’s State Business Tax Climate Index,   Governing magazine found no correlation between a state’s tax climate score and its unemployment rate.

But we love lists, and the states like to compare themselves with each other. So long as we’re clear on what these ranking are really measuring, they’re no worse than, say, BuzzFeed.

Tom Baxter

Tom Baxter has written about politics and the South for more than four decades. He was national editor and chief political correspondent at the Atlanta Journal-Constitution, and later edited The Southern Political Report, an online publication, for four years. Tom was the consultant for the 2008 election night coverage sponsored jointly by Current TV, Digg and Twitter, and a 2011 fellow at the Robert J. Dole Institute of Politics at the University of Kansas. He has written about the impact of Georgia’s and Alabama's immigration laws in reports for the Center for American Progress. Tom and his wife, Lili, have three adult children and seven grandchildren.


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