In our 12th annual canvas of CEO opinion, leaders favor states with fewer regulatory encumbrances and report that most remedies dangled by politicians only make things worse.
Even allowing for geographic location and weather patterns that are immutable, state economic conditions vary widely. The evidence suggests that pro-growth policies influence perceptions of competitiveness, particularly in the eyes of business leaders. Earlier this year, Chief Executive asked 513 CEOs to rank states they are familiar with on the friendliness of their tax and regulatory regime, workforce quality and living environment. (This latter category includes not just the cost of living but the education system and the state and local attitudes toward business).
Texas and Florida top the list, as they have every year for the past 12 years that we have conducted this survey. Despite having been hit hard by the shale energy bust, Texas is still held in high esteem by CEOs for its favorable economic reforms. But each year, Florida steadily edges up in the qualitative measures. The Sunshine State added 1 million private-sector jobs over the last five years, cut taxes 50 times and got rid of 4,200 burdensome regulations. In 2014, it surpassed New York as the third-biggest state for companies to flourish.
North Carolina and Tennessee held onto their third and fourth places from last year, while Indiana moved up to fifth place and Arizona leapfrogged from ninth to sixth. South Carolina secured seventh place (up from 10th last year) while Georgia, Nevada and Ohio ranked eighth, ninth and tenth respectively.
The fact that the Buckeye State surged from 22nd place to 10th this year may have something to do with the fact that Ohio has added 350,000 jobs since 2011, and Governor John Kasich reduced taxes by $4.8 billion, which The Washington Post says puts Ohio among the top four tax-cutting states in the U.S.
In this year’s survey, we also asked CEOs who operate directly from a state whether they view it as better or worse than leaders with indirect experience. For the most part, the perceptions of CEOs with firsthand experience do not differ widely from overall perceptions of CEOs. There are some exceptions: Hawaii-, Alabama- and Mississippi-based leaders tend to rank their states as more friendly than do CEOs overall. Minnesota, Utah and Pennsylvania, on the other hand, get lower marks from CEOs with firsthand knowledge than from those without direct experience. Louisiana, which once ranked among the top 10, dropped to 37th place, no doubt owing to its current $940 million budget disaster. Last January, John Bel Edwards, Louisiana’s new Democratic governor, said he learned of various “devastating facts” and decried sales of state assets to plug a $2 billion budget gap.
MOVING ON UP
As important as taxes and regulation are, they aren’t the only factor influencing a region’s attractiveness. Migration between states illustrates favorable intrinsic conditions, as well as wise policy decisions. From 1992 to 2011, some 62 million taxpayers changed their state of residence, according to IRS records. Estimates suggest this figure is more than the total populations of New York, Illinois and Florida combined. This trend of people voting with their feet has benefited North Carolina, Florida and Texas—all three of which are among the top 10 best states this year—as well as states like Utah and Wyoming.
The population losers tend to be the Rust Belt and Northeastern states like New York, Connecticut and New Jersey. Having said this, states such as Indiana, Ohio, Wisconsin and Michigan deserve credit for pro-growth policy reforms in the wake of years of poor policy decisions.
CEOs indicate that the quality of workforce is just as important—in some cases more important than the tax environment. (Utah and Nebraska score highest in workforce quality among all the states.) At $117 billion GE, CEO Jeff Immelt moved the industrial giant’s headquarters from Fairfield, Connecticut to Boston because he felt that the city would give GE access to the advanced thinking and talent afforded by an area with many top universities and colleges offering technical training.
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Chief Executive Group exists to improve the performance of U.S. CEOs, senior executives and public-company directors, helping you grow your companies, build your communities and strengthen society. Learn more at chiefexecutivegroup.com.
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1:00 - 5:00 pm
Over 70% of Executives Surveyed Agree: Many Strategic Planning Efforts Lack Systematic Approach Tips for Enhancing Your Strategic Planning Process
Executives expressed frustration with their current strategic planning process. Issues include:
Steve Rutan and Denise Harrison have put together an afternoon workshop that will provide the tools you need to address these concerns. They have worked with hundreds of executives to develop a systematic approach that will enable your team to make better decisions during strategic planning. Steve and Denise will walk you through exercises for prioritizing your lists and steps that will reset and reinvigorate your process. This will be a hands-on workshop that will enable you to think about your business as you use the tools that are being presented. If you are ready for a Strategic Planning tune-up, select this workshop in your registration form. The additional fee of $695 will be added to your total.
2:00 - 5:00 pm
Female leaders face the same issues all leaders do, but they often face additional challenges too. In this peer session, we will facilitate a discussion of best practices and how to overcome common barriers to help women leaders be more effective within and outside their organizations.
Limited space available.
10:30 - 5:00 pm
General’s Retreat at Hermitage Golf Course
Sponsored by UBS
General’s Retreat, built in 1986 with architect Gary Roger Baird, has been voted the “Best Golf Course in Nashville” and is a “must play” when visiting the Nashville, Tennessee area. With the beautiful setting along the Cumberland River, golfers of all capabilities will thoroughly enjoy the golf, scenery and hospitality.
The golf outing fee includes transportation to and from the hotel, greens/cart fees, use of practice facilities, and boxed lunch. The bus will leave the hotel at 10:30 am for a noon shotgun start and return to the hotel after the cocktail reception following the completion of the round.
