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     Superman Kurra Bewarse Username: Superman Post Number: 1448 Registered: 10-2005 Posted From: 75.73.208.143 Rating: N/A |
Leave it to the North Star State to chart a new course to competitiveness. Minnesota is America's Top State for Business in 2015, reaching the pinnacle of success by way of a much different route than our eight previous winners. Minnesota scores 1,584 out of a possible 2,500 points, ranking in the top half for all but two of our 10 categories of competitiveness. But what may be most instructive are the categories where Minnesota does not do well. Both involve cost. Indeed, the birthplace of Spam, Scotch Tape and the supercomputer marks a new first this year. Never since we began rating the states in 2007 has a high-tax, high-wage, union-friendly state made it to the top of our rankings. But Minnesota does so well in so many other areas—like education and quality of life—that its cost disadvantages fade away. As always, we scored all 50 states in more than 60 metrics in 10 broad categories of competitiveness. You can read more about our methodology here. This year's categories and point values are: Workforce (400 points) Cost of Doing Business (350 points) Infrastructure (350 points) Economy (340 points) Quality of Life (325 points) Technology & Innovation (250 points) Education (200 points) Business Friendliness (160 points) Cost of Living (75 points) Access to Capital (50 points) To some degree, Minnesota benefits from a trend that we have sought to reflect in our study this year. Rather than just seeking the lowest taxes or the highest incentives, companies are increasingly chasing the largest supply of skilled, qualified workers. So states are touting their workforces like never before, giving the Workforce category—where Minnesota finishes a respectable 13th—greater weight in our study. But Minnesota doesn't just stumble into the top spot by accident. The state's path to the top is marked by a carefully crafted and still controversial strategy by Gov. Mark Dayton, the first Democrat to hold the office in two decades. The hallmark of his plan is something most governors seeking to win the hearts of business would never dream of: a big tax increase. Dayton began calling for higher taxes almost as soon as he took office at the start of 2011, with the state facing a $6.2 billion budget gap. But his first attempt resulted in a standoff and a devastating three-week government shutdown. By 2013 he managed to push through a whopping $2.1 billion tax increase, primarily targeting smokers and wealthy people (one of whom is Dayton himself, an heir to the Target retail fortune). Last year Dayton did approve a $508 million middle-class tax cut. But the rate for top earners remains among the highest in the nation, at 9.85 percent. This year, with a state budget surplus of nearly $2 billion, one of the lowest unemployment rates in the nation and apparently no exodus of millionaires, Dayton has been taking a victory lap of sorts. In his State of the State address in April, he said the improvement in state finances had laid the groundwork for solid economic growth. More Minnesota businesses are expanding, so more Minnesotans are working. They are earning more money, which means they are paying more taxes," Dayton said. But he insisted the new tax structure is only a means to an end. "It is Minnesota's economic successes, not tax increases, that have produced our present budget surplus," he said. Dayton has championed tax breaks and subsidies for businesses, including a tax increment financing district set up in 2013 to help 3M build a $150 million research facility, as well as $250 million in state aid over the next 20 years to help the Mall of America build new roads and parking facilities. Even so, Dayton has won few friends in the business community—especially when he proposed earlier this year to spend much of the budget surplus on education. Republicans and business leaders warned the strategy would ultimately backfire. "Back-to-back billion-dollar surpluses show that the level of taxes on individuals and business owners is too high," the Minnesota Chamber of Commerce said at the start of this year's legislative session. "The best way to grow and expand the state's economy is to reduce uncompetitive business taxes." Republicans sought to undo the tax increases this year, while Dayton proposed increasing the gasoline tax. The two sides fought to a stalemate in a rancorous legislative session in June that ran into overtime, meaning Dayton's original tax hikes stand for now. But Republicans won a promise to revisit tax relief next year. Meanwhile, the legislature approved an additional $500 million in education spending demanded by Dayton, aimed at bolstering an area where Minnesota is already strong. In our study, Minnesota finishes in second place for Education, thanks in large part to some of the best-performing K–12 students in the nation. Minnesota has led the nation in average composite ACT scores nine years in a row, and 4th and 8th grade math and reading scores are among the best in the nation as well. In Quality of Life, Minnesota finishes third. Crime is low—just 234 violent crimes per 100,000 inhabitants in 2013, the most recent full-year figures available. The air is clean, and in the home of the Mayo Clinic, people are healthy. We have never considered weather when measuring quality of life—it's just too subjective. But anyone who has lived through a harsh Minnesota winter knows that Minnesotans don't just adapt to the cold, they embrace it—and are then rewarded with glorious springs and summers. Other top 10 finishes for the state include fifth place in Economy, sixth place in Technology & Innovation and ninth place for Infrastructure. Those strengths are enough to outweigh Minnesota's 35th-place finish for Cost of Doing Business and 32nd for Cost of Living. Minnesota raises any doubts about the more traditional path to success—including low corporate taxes, friendly regulations and antipathy toward unions—Texas puts those doubts to rest. The Lone Star State finishes second this year for the third year in a row, this year by one of the slimmest margins in Top States history. Texas misses the top spot by just 4 points. As in previous years, including the three times Texas took the top spot overall—2008, 2010 and 2012—the state brings a powerful arsenal to the competition. It includes the nation's best infrastructure and the second-best economy. Texas has withstood a sharp drop in oil prices without missing a beat, at least for now. But Texas falls short in our Education category at 28th, and Quality of Life at 33rd. Not only is crime on the high side and air quality relatively low, the state continues to lead the nation in the percentage of residents without health insurance. And Texas lacks some of the legal protections against discrimination that businesses are increasingly demanding. http://www.cnbc.com/id/102759561 |