The Business Climate Rankings Industry: Apparently, It's All a Crock

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Grading Places:  What Do the Business Climate Rankings Really Tell Us?  Second Edition.  A report by Good Jobs First.

From the executive summary.

The Small Business and Entrepreneurship Council’s U.S. Business Policy Index   (Wisconsin ranks 27th)

Includes 46 factors

• health care regulation (6)
• taxes (22)
• government services (7)
• miscellany
• crime 
• paid leave 
• renewable energy portfolio standards
• electricity rates
• eminent domain 
• tort liability. 
• Good Jobs First assessment
• 12 factors have anything to do with progressive tax rates
• 34 are "statistical background noise". 
• Compared to measures of state economic dynamism tracked by the Information Technology and Innovation Foundation, the USBPI does not correlate; that is, it does not apparently measure things that contribute to higher rates of innovation and entrepreneurship.

The Beacon Hill Institute’s State Competitiveness Report (Wisconsin ranks 18th)

45 variables:

• fiscal policy (6)
• human resources (8)
• technology (7)
• business incubation (8)
• What GJF considers "dubious" choices
• weekly unemployment benefits
• cell phones per 1,000 residents
• infant mortality rate
• percent of residents born abroad 
• Summary.  The study confuses cause and effect, including various measures that are the result of growth, such as labor participation rates, firm births, initial public offerings, exports, and public-budget surpluses. But even if Beacon Hill’s data smorgasbord added up to anything meaningful, the Institute completely undermines its report by making up 21 percent of the component numbers! For two states, two-thirds of their scores are made from whole cloth.

The Tax Foundation’s State Business Tax Climate Index (Wisconsin ranks 43rd)

35 variables, all focusing on taxes.

• corporate income tax (11)
• personal income tax (7)
• sales taxes (4) 
• property taxes (10) 
• GJF assessment:  The ratings consistently favor regressivity. 

The American Legislative Exchange Council’s Rich States, Poor States: The ALEC-Laffer Economic Competitiveness Index  (Wisconsin ranks 32nd)

Not easy to reformat this summary into bullet points.

....despite its aggressive claims, fails to predict job creation, GDP growth, state and local revenue growth, or rising personal incomes. Empirical evidence does not support its claims that estate taxes or graduated personal income taxes cause rich people to move and thereby retard economic development. No state is anywhere near “Laffer Curve” rates of taxation; the only certain outcome of a tax cut is lower revenues. And the only clear impact of “right to work” laws is lower wages.