glass half-something

I winced a little this morning when I saw the headline “California is worst state for business, CEO survey says” - I’ve written about enough of these rankings to assume I will usually find Rhode Island 49th out of 50, if not dead last.

So I was a little surprised when I dug up the full list from Greenwich, Conn.-based Chief Executive magazine and found Rhode Island ranked at No. 35 – better than every other state in New England except New Hampshire, which was No. 18. Connecticut and Massachusetts were way down at Nos. 44 and 45, respectively.

Rhode Island rose four spots from last year’s list, too, when it was No. 39. The breakdown for each state is here, and this is how the magazine summarized its methodology and its findings:

More than 500 CEOs considered a wide range of criteria, from taxation and regulation to workforce quality and living environment, in our annual ranking of the best states for business. …

While the Lone Star State may not be perfect — many leaders would like to see improvements in its education system — it is Periclean Athens compared to California in the eyes of the 550 CEOs surveyed for Chief Executive‘s seventh annual report on the best and worst states in which to do business. …

Business leaders graded the states on a variety of categories grouped under taxation and regulation, workforce quality and living environment. “Do not overtax business,” offered one CEO. “Make sure your tax scheme does not drive business to another state. Have a regulatory environment and regulators that encourage good business — not one that punishes businesses for minor infractions. Good employment laws help too. Let companies decide what benefits and terms will attract and keep the quality of employee they need. Rules that make it hard, if not impossible, to separate from a non-productive employee make companies fearful to hire or locate in a state.”

Not surprisingly, states with punitive tax and regulatory regimes are punished with lower rankings, and this can offset even positive scores on quality of living environment. While state incentives are always welcome, what CEOs often seek are areas with consistent policies and regulations that allow them to plan, as well as intangible factors such as a state’s overall attitude toward business and the work ethic of its population.

One skeptical note came from business consultant Peter Schaub. He told The Sacramento Bee he wasn’t sure about the CEOs’ judgment, since the five bottom-ranked states still have huge economies. “It makes me wonder if a so-called business-friendly state is one that just rolls over for business without any regard for things like pollution, business practices or treatment of workers,” he said.

Update: Anchor Rising’s Marc Comtois takes a deeper dive into the numbers for Rhode Island, which are worse than you’d expect in light of our No. 35 showing.

(photo: Tysto/Wikipedia)