One year ago, Chief Executive magazine surveyed the state’s business climate, and jumped its ranking of the state from 41st best to 24th best among the states.
That 17-place jump was best of any state in the country — and was a bigger jump than any state in Chief Executive’s 2012 comparison — which prompted a logical question: How in the name of Darwin Smith did that happen?
This year, almost 1½ years into the Walker administration, Chief Executive‘s survey of 650 business leaders (up from 550 a year ago) jumped Wisconsin another four spots, from 24th to 20th.
Chief Executive’s CEOs give Wisconsin three stars for taxes and regulation, and four stars each for workforce quality and living environment. I’m surprised we did as well as three stars for our (too high) taxes and (too much) regulation, but evidently CEOs believe things are going in the right direction.
The magazine quotes two anonymous CEOs:
“We only do business in Wisconsin. Since Gov. Walker was elected we have seen a significant improvement in taxes and business conditions.”
“In our home state of Wisconsin there is a palatable enthusiasm amongst business executives that we are roaring back due to a clear vision of job creation (e.g. mining in the north) and stable state budgets (allowing us to take more risks).”
(The survey took place before Democrats and Sen. Dale Schultz (RINO–Richland Center) killed mining in the north.)
Texas leads the survey, and California ranks dead last. Chief Executive passed on CEO comments about the (formerly) Golden State:
- California is the worst! They are doing everything possible to drive a business out of their state. If it were not for the climate, they would have lost half their population.
- California regulations, taxes and costs will leave only tech, life sciences and entertainment as viable. If you aren’t an elitist, no room here for the middle or working classes.
- California treats business owners like criminals. California has different overtime policies for its own employees vs. private sector.
- California’s labor regulation is a job killer. We will be moving our business out of the state, which will lose hundreds of jobs simply due to the poor regulatory environment.
- California should secede from the union—it is like doing business in a foreign country, it has its own exchange rate, and its regulation is crazy.
As for Texas, Chief Executive listed the businesses that chose to move there:
- Allstate, builds $12 million customer center in San Antonio. Reasons: Weather and lifestyle, plus Spanish-language capabilities.
- Caterpillar, building plants in Seguin and Victoria. Reasons: Access to cheaper, non-union labor; proximity to ports for exporting.
- eBay/Pay Pal, hiring more than 1,000 and expanding support facilities in Austin. Reasons: Access to tech talent, $2.8 million from the Texas Enterprise Fund.
- Facebook opens first U.S. operation outside of California, in Austin. Reasons: Access to creative and technical talent.
- GE Transportation, announces $96 million locomotive plant in Fort Worth. Reason: Cheaper, non-union labor
- Grifols USA, California-based subsidiary of Spanish parent, opens blood plasma testing facility San Marcos. Reason: Right skills sets, languages
- PETCO, in San Diego, opened its first customer support center outside of California in San Antonio in 2011. Reason: Access to cheaper space, skilled workers, funding from the Texas Enterprise Fund.
CEOs are the people who sign off on hiring decisions and expansion and location decisions. So if legislators and would-be governors (this means you, Tom Barrett and Kathleen Falk!) are serious about improving this state as a place to do business, that means they had better listen to business people.
Speaking of BarrettFalk, Chief Executive noted the Recallarama drama, which is culminating in Walker’s illegitimate recall June 5:
Governor Scott Walker’s battle with the unions in Wisconsin (See “Will Wisconsin Rise Again?”), a state that edged into the top 20 this year for this first time, demonstrates that the struggle for a pro-growth agenda can be contentious. As one Badger State business leader remarked, “Finally, Wisconsin is headed in the right direction.”
Chief Executive adds stats that serve to condemn Walker’s predecessor, Gov. James Doyle, and the previous party in charge in the Legislature. Wisconsin’s gross state product dropped 1.45 percent between 2007 and 2010, which is a 33-percent worse drop than the equivalent drop in Gross Domestic Product. During the 2000s, nearly 12,000 more people moved out of Wisconsin than moved into Wisconsin. And to use a fact that condemns both Doyle and Walker, state and local taxes are 18 percent higher than the national average.
I’ve maintained Wisconsin hasn’t done enough to improve the state’s business climate, and Wisconsin certainly hasn’t cut taxes to any appreciable extent. But apparently the progress Wisconsin has made has gotten notice. The survey lists the state’s Development Trend as “positive,” summarizing, “New conservative statehouse is shaking things up, drawing business favor.”
Whether that continues depends on what happens June 5 and Nov. 6.