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These Are the Top 10 Most (and Least) Business-Friendly States in America


Are there any political implications?

Oh yes, it’s time for another “top whatever” list and, boy, it's a good one. We’re particularly excited about this list because we feel it carries with it some political implications.

Red represents business-friendly states & blue represents, well, pretty much the exact opposite.

Using 51 metrics of competitiveness developed with input from business groups including the National Association of Manufacturers and the Council on Competitiveness, CNBC ranked each of the 50 states according to how open they are to business.

“States received points based on their rankings in each metric. Then, we separated those metrics into ten broad categories, weighting the categories based on how frequently they are cited in state economic development marketing materials,” CNBC reports.

“That way, our study ranks the states based on the criteria they use to sell themselves,” the report adds.

This year’s categories and possible point totals included:

•    Cost of Doing Business (350)

•    Workforce (350)

•    Quality of Life (350)

•    Infrastructure & Transportation (325)

•    Economy (325)

•    Education (225)

•    Technology & Innovation (225)

•    Business Friendliness (200)

•    Access to Capital (100)

•    Cost of Living (50)

However, for brevity’s sake, we’ll only present how the most- and least-friendly states score in the following categories:

Cost of Business: CNBC looked at each state's tax burden, including individual income and property taxes, as well as business taxes.

"Utility costs can add up to a huge expense for business, and they vary widely by state. [CNBC] also looked at the cost of wages, as well as rental costs for office and industrial space (rental cost information furnished by CoStar Group)."

Cost of Living: “The cost of living helps drive the cost of doing business. From housing to food and energy, wages go further when the cost of living is low."

Economy: “A solid economy is good for business. So is a diverse economy, with access to the biggest players in a variety of industries."

That being said, CNBC ranked states based on basic indicators of economic health and growth.

Overall, revenue “performance remains positive, expenditures in most states are stable and few states have faced mid-year budget shortfalls in fiscal year 2012,” the National Conference of State Legislators reported in May.

Simply put, now that their books are in order, a few states can finally get back to focusing on business growth and job creation.

Here are the 10 most business-friendly states in the U.S.:

10. Wyoming

Cost of Business: 10

Cost of Living: 27

Economy: 1

9. Georgia

Cost of Business: 14

Cost of Living: 16

Economy: 30

8. Colorado

Cost of Business: 40

Cost of Living: 33

Economy: 33

7. South Dakota

Cost of Business: 3

Cost of Living: 30

Economy: 12

6. Nebraska

Cost of Business: 13

Cost of Living: 11

Economy: 9

5. North Dakota

Cost of Business: 16

Cost of Living: 28

Economy: 2

4. North Carolina

Cost of Business: 21

Cost of Living: 21

Economy: 31

3. Virginia

Cost of Business: 32

Cost of Living: 20

Economy: 10

2. Utah

Cost of Business: 11

Cost of Living: 6

Economy: 7

1. Texas

Cost of Business: 28

Cost of Living: 3

Economy: 5

Here are the least business-friendly states in America:

10. New Jersey

Cost of Business: 43

Cost of Living: 45

Economy: 39

9. Louisiana

Cost of Business: 9

Cost of Living: 17

Economy: 36

8. Delaware

Cost of Business: 32

Cost of Living: 37

Economy: 19

7. Connecticut

Cost of Business: 46

Cost of Living: 48

Economy: 40

6. Nevada

Cost of Business: 30

Cost of Living: 22

Economy: 50

5. Mississippi

Cost of Business: 18

Cost of Living: 8

Economy: 48

4. Alaska

Cost of Business: 44

Cost of Living: 26

Economy: 4

3. West Virginia

Cost of Business: 24

Cost of Living: 26

Economy: 7

2. Hawaii

Cost of Business: 50

Cost of Living: 50

Economy: 41

1. Rhode Island

Cost of Business: 45

Cost of Living: 44

Economy: 49

So, circling back to the beginning of this article, the big question is what, if any, are the political implications?

Well, considering that nine out of ten of the most business-friendly states are Right to Work states and that seven out of ten of the least business-friendly states are subject to forced unionism, we'd say that implies an awful lot.

Click here to see how your state stacked up.

This story has been updated.

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