Sixth Annual Small Business Survival Index

The Small Business Survival Committee (SBSC) released its sixth annual rankings of the states according to their respective policy climates for small business and entrepreneurship in the Small Business Survival Index 2001.

According to SBSC chief economist Raymond J. Keating, author of the study, The Small Business Survival Index 2001‚ offers a gauge by which to measure and compare how government in the states treat small businesses and entrepreneurs. Since small business serves as the backbone of the U.S. economy--for example, by providing the bulk of new jobs and majority of innovations˜every state and local lawmaker should be concerned with the well-being of small business.

"In an increasingly mobile and competitive national economy, differences in government-imposed costs of doing business can make a huge difference between whether a state grows economically or falls behind," states SBSC president Darrell McKigney. "The purpose of the Small Business Survival Index 2001‚ is to let citizens and lawmakers know how they stack up with the rest of the country in terms of being friendly to small businesses and economic growth."

The Small Business Survival Index 2001 ties together 17 major government-imposed or government-related costs impacting small businesses and entrepreneurs across a broad spectrum of industries and types of businesses--personal income taxes, capital gains taxes, corporate income taxes, property taxes, sales taxes, death taxes, unemployment taxes, health insurance taxes, electricity costs, workers‚ compensation costs, crime rates, right to work status, number of bureaucrats, tax limitation status, Internet taxes, gas taxes, and state minimum wages. These measures are combined into one index number--the Small Business Survival Index.

Keating notes, "The Small Business Survival Index manages to capture much of the governmental burdens impacting critical economic decisions--particularly affecting investment and entrepreneurship--state by state."

The most entrepreneur-friendly states under the Small Business Survival Index 2001 are: 1) Nevada, 2) South Dakota, 3) Washington, 4) Wyoming, 5) Florida, 6) Texas, 7) New Hampshire, 8) Alabama, 9) Mississippi, 10) Tennessee, 11) Colorado, 12) Michigan, 13) Illinois, 14) Alaska, and 15) Virginia. In contrast, the most anti-entrepreneur policy environments are offered by the following: 37) New Jersey, 38) Montana, 39) Iowa, 40) Ohio, 41) West Virginia, 42) Vermont, 43) New York, 44) California, 45) New Mexico, 46) Minnesota, 47) Kansas, 48) Maine, 49) Hawaii, 50) Rhode Island, and 51) District of Columbia.

Keating concludes, "The best policy environment for entrepreneurship consists of low taxes, limited government, restrained regulation, and government protecting life, limb and property. States following such a governing philosophy will reap great rewards from America‚s entrepreneurs including faster economic growth and increased job creation."

Following are the complete state rankings for the Small Business Survival Index 2001.