The Small Business & Entrepreneurship Council (SBE Council) released its 22nd annual look at how public policies in the 50 states affect entrepreneurship, small businesses and the economy.
Montana ranked 32nd – the same as last year, with a slightly worse index score of 90.05 compared to 89.771 in 2017 (the lower a score the better). Our neighbors, South Dakota ranked 3rd with a score of 48.548, and Wyoming, ranked 4th with a score of 50.925, the ranking of other neighbors are North Dakota, 22nd with a score of 79.359 and Idaho ranking 26th, scoring 84.56.
The Annual Index ranks the states on small business policy friendliness. It ranks the 50 states according to 55 different policy measures, including assorted tax, regulatory and government spending measures.
In terms of their policy environments, the top-ten most entrepreneur-friendly states under the “Small Business Policy Index 2018” are:
#3 South Dakota
In contrast, the most entrepreneur-unfriendly policy environments are:
#47 New York
#49 New Jersey
Raymond J. Keating, SBE Council’s chief economist and author of the study, noted, “Just as at the federal level, tax, regulatory, and government spending and debt policies in the states matter in terms of business and investment decisions, and in turn, their impact on a state’s economy and competitiveness. Punish entrepreneurship and investment via costly governmental policies, and quite simply, you punish small businesses, workers, and the economy.”
Keating noted, “Economic growth and population growth are faster in the top half of the states ranked on the Index compared to the bottom half. For good measure, in terms of the movement of people among the states, those states ranking in the bottom half on the Index lose significant population to the states ranked in the top half.” The report highlights differences in terms of real economic growth, population growth, and net domestic migration (or the movement of people between the states, that is, excluding births, deaths and international migration).
SBE Council President and CEO Karen Kerrigan said: “Fortunately for entrepreneurs and small businesses, the policy environment has improved at the federal level over the past year. There is a concerted effort and real action to reduce tax and regulatory burdens on small businesses and entrepreneurs, which has improved the overall business environment making the U.S. more globally competitive. The same can be said in a variety of states in recent times, such as Indiana, Ohio, Arizona and North Carolina. In those states, governors and state legislators have recognized the need to offer a competitive policy environment in order to attract and keep the entrepreneurs, businesses and investment that drive economic and job growth. But some states, like California, just keep getting worse by piling more costs and taxes on small businesses and entrepreneurs.