We’re number 25!

The latest state business climate ranking shows that Wisconsin has ascended from disaster area to, well, mediocrity.

CNBC’s America’s Top States for Business 2011 ranks Wisconsin 25th, up from 29th in 2010. Wisconsin ranks below Minnesota (seventh), Iowa (ninth),  Indiana (15th), Missouri (16th) and Illinois (19th), and ahead of only Michigan (34th) among Midwestern states.

The CNBC comparison “measures the states by their own standard: the selling points they use to attract business. We separate those pitches into the ten categories, which are then weighted in the study based on how frequently the states use them as selling points.” Which is an interesting approach. Most business climate comparisons rate states based not on the seller’s perspective, but the buyer’s — that is, the perspective of businesses that have to deal with the tax and regulatory structures of each state, as well as the other things that go into a state’s share of the U.S. economy.

Wisconsin ranked (the higher ranking the better, of course) 13th in the cost of doing business (income and property taxes, office and industrial rental costs, and utility costs), 15th in education (K–12 and post-high school), 19th in quality of life, 21st in technology and innovation, 22nd in infrastructure and transportation and in “economy” (including “projected budget gaps and surpluses”), 23rd in cost of living, 27th in access to capital, 28th in business friendliness (“the perceived ‘friendliness’ of their legal and regulatory frameworks to business”), and 46th in workforce (“the education level of their workforce, as well as the numbers of available workers,” worker training programs, and level of unionization, because “While organized labor contends that a union workforce is a quality workforce, that argument, more often than not, doesn’t resonate with business”).

It is interesting to note that our 13th ranking in the top factor in this survey, cost of doing business, was basically negated by the second factor, “workforce.” The workforce ranking also seems to belie the state’s education ranking (is it possible that state schools are, dare we suggest, overrated?) while demonstrating again that in the minds of business (that is, the employers of most workers), unions are fundamentally anti-business.

The next point perhaps explains why Wisconsin finished where it did in the Midwest:

In 2011, for the first time since we launched the study, states are de-emphasizing their cost of doing business — including taxes and utility rates. That could be because states are facing pressure to raise taxes or lower business incentives in order to balance their budgets. …

Rather than crowing about their low costs, states are increasingly accentuating the positive aspects of a negative economy—like a plethora of available workers.

Wisconsin is one of those states that already raised its taxes — $2 billion of tax increases by the spendthrift Doyle administration and the previous tax-wasting Legislature. Illinois raised its taxes earlier this year, and Minnesota is about to raise its taxes because Minnesotans cannot stand the thought of a government shutdown. So perhaps next year’s comparison will raise Wisconsin’s standing in the Midwest.

Until then, certainly 25th is better than, say, 30th or 44th. It is not, however, something to crow about, which may be why the Walker administration didn’t send out a news release trumpeting a 25th ranking. The various subrankings also seem to indicate that Wisconsin needs to do a lot more work, and not just in taxes, to improve the state’s business ranking.


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