Ohio (No. 27): Needs a Population Pickup
Ohio has been adding jobs at the fastest rate in the Midwest. Unemployment, which fell to 5.7 percent in July, was lowest in Ohio since October 2005. Manufacturing is on the rise, centered on the Dayton area and its export-fueled economy. According to Deloitte’s Buelow, the Buckeye State’s upsides include JobsOhio, “a very good, very well-funded program” that’s “putting the pieces in place to address retention needs.” One downside is labor supply; the state “needs population growth” in cities like Cleveland, says economist Bill LaFayette, who worries that sluggish population growth and Millennial Generation resistance to manufacturing careers will eventually deter growth.
Tax reform “has made the state very competitive,” says site selector Gigerich. Ohio ranks third in the nation in terms of pro-business tax environment, according to the Tax Foundation. A joint Ernst & Young and Council on State Taxation ranked Ohio third in tax burden. Incentive offerings “are not as large as they used to be,” says consultant Bosman. Ohio spends over $3.24 billion a year on incentive programs, according to The New York Times subsidy database.
Minnesota (No. 34): Taking on Taxes
Minnesota outpaces most of the nation in economic growth. The Gopher State ranked 66.4 on Creighton University’s Business Conditions Index in July, tops in the Midwest, and more than 10 points above its 2013 rating. State economic data show growth across nearly all industries, led by Construction and Health Care gains; medical-device manufacturing continues to expand its footprint. Minnesota business owners are optimistic; this spring, 52 percent of Minnesota business-service firms expect revenues to rise over the next 12 months, up from 46 percent last year, according to a Federal Reserve Bank/Minneapolis study.
Governor Mark Dayton signed a wide-ranging, tax-reform bill into law this spring that repealed much-reviled sales taxes on warehousing and storage services, electronic equipment repair and maintenance and telecommunications equipment, as well as lowering income taxes and estate and gift taxes. Minnesota spends over $239 million per year on incentive programs, according to The New York Times database.