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Richard Davis’ column on state politics frequently runs in the print edition of The News Tribune. He was president of the Washington Research Council, a statewide think tank, from 1986 through 2006. Currently, as a principal with The Simeon Partnership, Inc. he coordinates the activities of the Washington Alliance for a Competitive Economy, a business coalition founded by the Research Council, the Association of Washington Business and the Washington Roundtable.
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The business magazine Forbes Inc. handed Gov. Chris Gregoire a gift-wrapped campaign coup Thursday when it ranked Washington third in its latest annual ranking of “Best States for Business.”
The gov’s campaign cheekily took advantage by issuing a “correction” apologizing for a TV campaign ad, based on Forbes’ 2007 rankings, that only claims a fifth-best rating for Washington. The TV ad will be amended, her minions assured us.
But some folks always see the glass as half-empty. The free-market Washington Policy Center countered today with a blog post by Carl Gipson trying to take some of the luster off the new Forbes ranking.
“Here we go again,” Gipson complains. He acknowledges that Forbes is “a relatively reliable periodical of everything business and finance.” But, Gipson insists, “There's enough information out there among other reputable sources that should temper the celebratory champagne popping.” He continues:
During this political season we are going to hear a lot of talk about where Washington ranks in business friendliness, and people are going to argue over which ranking system takes into account the correct parameters, etc. My worry is that we will get caught up in ranking the rankings, instead of having a civilized discussion about how to improve the business climate regardless of how other, out-of-state media outlets and institutes think we are doing.
But for those of you who are interested in what some of those other institutions and media outlets are saying, here's a brief rundown. (Go to Gipson's blog for the links):
- Washington tied for 18th by CNBC
- Washington ranked 38th in Economic Freedom in North America by the Frasier Institute
- Washington ranked 31st in Economic Outlook Rank by ALEC
- Washington ranked 11th in 2008 State Business Tax Climate Index by the Tax Foundation
- Washington ranked 4th in Small Business Survival Index 2007 by the SBE Council
- Washington ranked 15th in highest cost of doing business by the Milken Institute
- Washington ranked 7th by the Beacon Hill Institute
Here are the rankings Gregoire’s campaign likes to tout:
Now Washington state has been ranked:
• Third best state to do business – Forbes (http://www.forbes.com/2008/07/30/virginia-georgia-utah-biz-cz_kb_0731beststates_table.html)
• Fourth best state for starting a business – Fortune Small Business (http://money.cnn.com/galleries/2007/fsb/0711/gallery.Top10BestStates.fsb/4.html)
• Top three best managed states – Pew Institute (http://www.pewcenteronthestates.org/gpp_report_card.aspx)
Third greenest in “America’s Greenest States” – Forbes (http://www.forbes.com/2007/10/16/environment-energy-vermont-biz-beltway-cx_bw_mm_1017greenstates_2.html
Bottom line: The governor doesn’t really have much to do with the relatively healthy condition of the state’s economy. For that, more credit is due to Boeing and Microsoft, the University of Washington’s powerful research machine, the ports of Tacoma and Seattle, the state’s strong agricultural sector and the natural blessings that make Washington a nice place to live.
Washington’s regulatory climate for business isn’t onerous. But Republicans and business allies always want less regulation, and Democrats and their labor friends always favor more.
Virginia and Utah, by the way, were the states rated first and second by Forbes.
COMMENTS:
When someone can't understand how business is taxed in Washinghton state, how can they competently rank the business-friendliness of Washington state?
If we continue to pretend all is rosy, when it is not, even the rose-colored-glasses will not be enough after a while.
Why would you assume that Forbes doesn't take into account the B&O tax? they're pretty savvy people. If I weren't taking off on a two-week trip Saturday, I'd try to run that down with Forbes. Anybody else care to try? Maybe the folks at WPC could look into that.
Washington's lack of a corporate income tax is probably a big plus for Forbes.
It is not an assumption. It is memory from past discussions. The business community has had this discussion with Forbes and the SBCE year after year- they either do NOT get it, or don't wan't to get it.
We are unique in our approach to business taxation, but that means surveys can get caught comparing apples to asparagus. Forbes ranks us higher because of a lack of an income tax- business or personal.
Personally, I believe that the business climate in this state is substantially worse for small business than for big business- we are not as bad off as some, and worse off than others. We are improving, especially in terms of regulatory attitude.
But too often, a ranking like Forbes is used to say, "See, we are doing okay." And Forbes is not particularly known for paying close attention to small business issues.
And year after year, the SBCE and Forbes rankings roll out, substantially different than any other rankings.
Our policy makers ought to ignore these outsider surveys, and pay attention to what real folks here in state have to say. The improvements that have come have come not from any responding to some survey, but because policy makers and administrators listened to real constituents.
Give me a round of the Governor's "Open for Business" meetings where her cabinet- yes, the actual directors of many of the major state agencies- are sitting down with real small business owners and talking about what works and what doesn't. Give me that over any survey, any day. Those meetings have resulted in real changes.
I do not know of any change that has come from one of the national rankings.
We make our livings working to improve state government, making it work better for our clients- and for the public at large. One can simply look at my post above about Governor Gregoire's cabinet members meeting with small business owners to see that I do not go around just "dooming and glooming" about state government. What has notme ever done about a problem?
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