Georgia (No. 10): Struggling for Growth
The Peachtree State’s business-friendly governor found friends in the business community by seeking their suggestions for economic development, thus spurring an increasingly pro-business image in the business press. Behind the imagery, however, are troubling metrics. Georgia is one of two states—the other is Nevada—where real per capita GDP has fallen in this young century, slipping beneath the national average for the past 15 years. Positive signs include recent passage of workers’ compensation reform.
Georgia’s “tremendous in terms of increasing the ease of doing business, creating incentive packages and handling business recruitment,” says local economist Jay Garner. Rural areas, however, greatly lag metro Atlanta in infrastructure and workforce readiness. Georgia’s state and local tax burden ranks 16th-lowest in the nation, according to the Tax Foundation, and 32nd in its State Business Tax Climate Index. Georgia spends over $1.4 billion per year on incentive programs.
Virginia (No. 11): Bring on Big Government
Virginia’s close proximity to the nation’s capital positions it as a natural for defense-related industries and contractors of all stripes—and leaves it vulnerable to government cost-cutting and other budgetary rollbacks. Professional, scientific and technical services employment—proxies for government contractors—is down 2.1 percent this year. In contrast, financial services employment is expanding at triple the national rate, and the state remains a magnet for corporate headquarters. More than 70 companies with revenues north of $1 billion call the state home.
“If you are looking for a capable work force, executive-style living, connectivity to service providers and you need to be in proximity to the capital, it’s very tough to beat Virginia,” says site selector Thomas Stringer. Major recent relocation and expansion announcements include Shandong Tranlin Paper Company’s $2 billion investment in advanced manufacturing operations in Chesterfield County, Microsoft’s $347 million Mecklenburg County expansion and CEB’s decision to invest $150 million in a new headquarters in Arlington.
The Tax Foundation ranks Virginia’s state and local tax burden 21st-lowest out of 50 states, and ranks its business tax climate 26th. Virginia spends over $1.29 billion per year on incentive programs Alabama (No 17): Taxed for Talent Driven in part by aerospace gains, Alabama’s economy is on pace to grow 2.4 percent this year, up from 1.9 percent last year, according to the center for Business and Economic Research at the University of Alabama’s Culverhouse College of Commerce.