In recent weeks, good news has come in the form of some major economic development announcements from Governor Perdue and the Department of Economic Development.  As Senate Economic Development chairman, I have worked in committee this year to ensure that Georgia’s government is not over-regulating businesses.  Our Small Business Initiative has been hearing directly from entrepreneurs and business leaders from across Georgia on how to improve our climate for small business.  It is great to see that some of our work is beginning to pay off, and Georgia is gaining ground as a state in which to do business. 

Number Two in Business Climate

According to an influential national economic development trade publication, Georgia is ranked the second best state in the nation in which to do business.  In its November 2007 issue, Site Selection magazine ranks Georgia the state with the second best business climate in the nation, up from number four last year.  Georgia’s business environment was also ranked third in a survey of corporate site seekers across the country, which comprises 50 percent of Site Selection’s total score.  This group based its scores on factors such as availability of desired work-force skills, efficiency of the permitting/regulatory process and land/building prices and supply.  The other 50 percent of the annual business climate rankings is determined by states’ performances in the company’s new plant database, which tracks new and expanded business facility activity.   

Georgia has never ranked lower than tenth (2000 and 2001) in the national poll, and has been among the top four for the last four years.  Georgia’s business environment was ranked fourth in the country earlier this year by cable network CNBC, and the state also has received top rankings in workforce training (number one, Expansion Management magazine); fiscal policies (number one, Arthur Laffer Report) and entrepreneurial activity (number three, Kauffman Foundation). 

Big Strides for Small Business

In a separate study, Georgia was ranked number 12 in the nation by the Small Business Survival Index for its entrepreneurship climate, vaulting 13 places from number 25 in 2006.  The Survival Index scores each state and the District of Columbia on 31 factors, including taxation, regulatory environment, healthcare and other costs of doing business.  Some of the areas in which Georgia scored the best include adjusted unemployment taxes, government spending trends, job growth and highway cost effectiveness.  The DC-based Small Business & Entrepreneurship Council (SBEC) publishes its Small Business Survival Index on an annual basis to convey the importance of small business to innovation, job creation, economic opportunity and the U.S. economy. 

In the first meeting of our Small Business Initiative, Senate and House lawmakers heard from noted economist Raymond Keating of the SBEC, who plays a major role in creating the Small Business Index each year.  Mr. Keating explained that Georgia ranked 25th in the Council’s 2006 Small Business Index, and lawmakers asked him direct questions on ways to improve Georgia’s rankings.  As we continue to develop legislation that will further enhance the climate for small business in Georgia, we are already seeing great results and gaining ground on other states. 

Falling tax burden

In other related economic news, a national organization that rates states on business-friendly tax climates has ranked Georgia 20th in the country, which is a gain of two positions since a year ago.  The Tax Foundation has been in the business research and public education arena since 1937.  According to the Foundation, good tax systems “levy low, flat rates on the broadest bases possible and treat all taxpayers the same.”  The five areas of taxation measured are:  individual income taxes, major business taxes, sales taxes, unemployment insurance taxes and property taxes. 

At 20th, Georgia had the best tax score of all states in the Southeast except Florida, which was fifth and Tennessee at 16th.  Other rankings in those states that touch Georgia were:  South Carolina, 26th, North Carolina, 30th and Alabama, 21st. 

As a state lawmaker, it is comforting to know that despite some of the negative headlines we’ve seen lately, Georgia’s economy is doing quite well and gaining ground on (even surpassing) other large states like Texas, Florida and New York.  Business, especially small business, is the backbone of our state’s economy, and we will continue to look at new ideas and proposals that will foster a great business climate in our state.  By continuing to improve our state’s healthcare, transportation and education infrastructure, we will continue to see new businesses breaking ground in Georgia. 

Please feel free to contact Sen. Chip Pearson at his office in Atlanta at 404.656.9221 or by email at chip@team51.org.