5 Things You Need to Know Before You Decide to Move or Open Up a Business

A number of developments have shaken the nation’s economic-development community of late, casting individual states in new or different lights, and underscoring just how heated the competition is among states for major economic-development wins and CEO business. If you are looking for a new location to move or grow your business, make note of these latest events before making any decisions.

1. Connecticut raises taxes—again. Ranked No. 45 in the magazine’s list for 2015, largely for its punishing taxes, Connecticut doubled down again in June as lawmakers approved new business taxes that would cost General Electric, its marquee private employer, as much as $750 million over the next two years. GE CEO Jeffrey Immelt had been able to stomach the high-tax approach taken by the company’s home state until that moment, whereupon he raised the possibility that he might move GE headquarters to another state. New York, Indiana, Georgia, Ohio and other states quickly lined up with interest.

“Texas has been losing thousands of jobs as a result of the oil-price collapse and the Lone Star State’s continued dependence on hydrocarbons.”

2. Kansas kicks growth into gear. Kansas Governor Sam Brownback was roundly criticized for following the advice of supply-side-economics guru Arthur Laffer in 2012 and slashing taxes to stimulate growth. For the first two years, the Kansas economy languished and the budget deficit grew, giving political and media critics of Brownback a field day. But lo and behold, since March 2013, unemployment in Kansas has dropped to 4.2% from 5.5%, now tied for 14th-lowest in the country. And in 2014, Kansas moved to 21st in private-sector job growth from 38th in 2012. Wage growth in the second half of last year was nearly double percentage-wise than the national average.

3. Illinois governor puts his money where his mouth is. Bruce Rauner realized that he wouldn’t be able to change the state’s high-tax, anti-business political culture just because he was a Republican and he won election last year, then called out the Democrats who control the state legislature to do public-union pension reform. So he has been dispersing hundreds of thousands of dollars of his own money into the campaign accounts of “every GOP lawmaker in Illinois,” according to The Wall Street Journal, “as the state’s fiscal crisis grows and deadlines near.”

4. Texas is hanging on. Other states have been looking for signs of weakness in the state that has ranked No. 1 in the BWSB for 10 years. And they finally believe they’ve found one in the fact that Texas has been losing thousands of jobs so far this year, thanks to the oil-price collapse this fall and the Lone Star State’s continued dependence on hydrocarbons. But Texas’ unemployment rate has remained way below the national average, and its economy seems diversified enough to withstand this blow pretty well.

5. Auto winners keep winning. Though most new auto-assembly plants have been situated in Mexico lately, not the United States, two states that already are rich with car factories very recently have emerged as big winners again. Volvo said it planned to put a $500-million assembly plant in North Carolina, its first in America, while Aston Martin CEO Andy Palmer said that his company is likely to decide by the end of the year to build a factory in Alabama. In addition, a Chinese company has purchased property in Springfield, Massachusetts and plans to build a subway car factory there, to be sold to Boston’s metropolitan transit system.

If the rest of 2015 unfolds as the first half has, economic-development policies and consequences will remain big headlines and have much to say about the continuing competition among states.


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