A few months ago, the American Legislative Exchange Council placed Idaho fifth best in the nation in its Rich States, Poor States annual rankings. But in its more recently released America’s Top States for Business, TV cable network CNBC finds us only 16th.
What happened?
After raking us over 200 policy variable coals, the Mercatus Center at George Mason University liked what it saw in Idaho, placing the state sixth best in the country in its biennial Freedom in the 50 States report last year.
But Idaho dropped in The Tax Foundation’s 2014 State Business Tax Climate Index, 18th; sunk further in Forbes magazine’s Best States For Business and Careers list, 25th; continued its tail spin in the Small Business & Entrepreneurship Council’s Small Business Policy Index, 32nd; before landing sprawled on the pavement in the Fraser Institute’s Economic Freedom of North America report, 34th.
What’s going on here?
Proceed With Caution
“Do not place too much stock in any of these state rankings,” warns economist William J. Dennis, the National Federation of Independent Business’ senior research fellow. “They are only a set of arbitrary indicators, and some are very bad. They also fail to take into account the varying needs from business to business. For instance, if I manufacture aluminum, the cost of electricity is everything to me. If that cost is too high, even living in a low-tax state is of minimal help to me. Another example: How do you really measure a regulatory climate, by the number of pages in the state code? Considerations like these are the reason NFIB has never come up with a state-ranking index of its own. There are just too many components to accurately measure a state.”
Added Suzanne Budge, NFIB’s Idaho state director: “Want to know where Idaho really ranks? Ask NFIB members. They’re here on Main Street dealing with the laws and policies that govern our state every day on the most retail level. I single out NFIB members from other small-business owners, because they have a history of a greater commercial, civic and governmental involvement, and, as a result, the knowledge that brings a much more informed opinion to public discourse.”
