So now is a good time to become even more business-friendly.
Indiana got some very good news last week on the economic development front. A survey of more than 500 chief executives by Chief Executive magazine ranked Indiana as the best place to do business in the Midwest and the fifth-best in the whole nation.
Gov. Mike Pence was appropriately enthusiastic about the results: “On the heels of the largest state tax cut in Indiana history, this ranking is validation of the work we have done since day one to make Indiana the top jobs state in the country,” he said. “With our talented workforce, solid fiscal house and robust infrastructure, the Hoosier state’s job creation efforts are receiving national attention. Chief executives know that Indiana is one of the few states that actually works for business.”
Some might call that overly enthusiastic, especially those who keep calling for greater “investment” by the state, i.e., tax increases. After all, they argue, the state has had that business-friendly reputation for years, and what has it gotten us? Job growth remains anemic, and our unemployment rate is still above the national average.
That argument misses the point.
Having a reasonable tax and regulatory structure is but one factor companies have to consider when deciding where to build or when to relocate. It can be difficult to precisely measure how positive an effect such business-friendliness has and whether it is strong enough to offset such things as climate and quality of life.
But the absence of such a welcoming attitude would surely be noticed. In times like these, when the national economy is barely recovering and still very fragile, a state like Indiana, with nothing exactly unique to offer, cannot afford to be seen as hostile to business.
In fact, a good argument could be made for Pence’s call to become the best state in the nation for business instead of merely fifth. The governor was able to get only half of what he wanted in income tax cuts from the General Assembly, and they will be phased in over a longer period, so their effect on the business climate will be modest at best. This favorable ranking gives him a good weapon with which to redouble his efforts.
Many of those 500 chief executives are likely to be looking around for a new home in the next year, so knowing they might be receptive to a call from Indiana gives us a head start on most other states.
This is the only state in the Midwest to make the top five. Illinois, on the other hand, ranked last in the Midwest and 48th nationwide.