Worst Places To Do Business

What do New York, California, New Jersey, Michigan, and Massachusetts have in common? They top the list of worst states to do business in, according to a survey of business executives conducted by Development Counselors International. They are facing serious budget shortfalls. And they are, by and large, the bluest of the blue states.

Steven Malanga describes these anti-business states as awash in red ink.

The DCI study, coming as it did amidst growing talk of state fiscal crises around the country, is particularly revealing. Of the approximately $48 billion in accumulated budget shortfalls that the 29 states with projected deficits are facing, $33 billion, or two-thirds of the gap, is concentrated in those five states considered by corporate executives to be the least friendly to business.

The states rated most friendly to business – Texas, North Carolina, Florida, Georgia, and Tennessee – together account for only $4.1 billion of the total. These are all red states, although some are borderline red and the state governments of North Carolina and Tennessee are controlled by Democrats.

Malanga makes the point that the states facing the worst budget shortfalls are suffering from federal policies, but from their own. They have chased off their business base.

As the fiscal problems of some states increase, we are likely to hear more about how the federal government must bail them out. It’s the failings of the federal government (that is, the Bush administration), that are responsible for state budget woes, so the argument goes. But any look at the states with the biggest deficits reminds us that governors and legislatures are largely the authors of their own problems, and that the biggest trouble some of them seem to have is that their taxing and chronic overspending have made them toxic to the business community. Don’t ask the feds to fix that.