States do compete with one another for business and for people. When we queried CEOs last January on their views of the best and worst states for business several patterns emerge.
In the sixth annual ranking (see Best and Worst States for Business 2010 story) the most highly rated 10 states, with perhaps one exception, are all red states – those with lower tax and regulatory burdens, lower costs of living and a friendlier attitude to business. By contrast, the states deemed worst for business: California, New York, Michigan, New Jersey and Massachusetts – regions that persistently adhere to their high-tax, high cost, anti business status – are the bluest of the blue states.
The real ticking time bomb for states is the swelling pension liability owed to government employees. According the Pew Research Center, $3.35 trillion has been promised to employees for retirement, but only $2.35 trillion is there. Even as roads and bridges fall into disrepair, politicians divert tax money to pay for salary and pension increases for government workers. In California, unfunded pension and health care liabilities for state workers topped $100 billion. In Michigan it’s $50 billion. New Jersey owes a staggering $90 billion. Not surprisingly these are states that have also experienced significant out migration. People are voting with their feet. The political elites in Sacramento and Albany have traditionally dismissed out-migration trends as marginal, but this misses the larger demographic adjustment – it’s the more dynamic and resourceful higher-income earners that leave and those with lower skills requiring public assistance who take their place. Economists and tax-policy analysts have long recognized the link between people’s behavior and higher relative marginal rates, especially in higher income brackets. And with the 2010 census in progress, that sucking sound you hear is the number of lost congressional seats due to reapportionment.
Tax progressivity, which tends to be more progressive in blue states, explains why tax receipts are more volatile in those states, something which makes them less attractive to business. When times are good it pushes more citizens into higher tax brackets thus inflating revenues. But when times are bad state revenues fall harder. Texas, which has been ranked consistently as the best state for business, is notable for its lack of a highly progressive income tax – perhaps because it doesn’t have one at all! Yet remarkably, its children get educated, its road and bridges are repaired and its hospitals function. Something to think about.
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.
