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Costs of doing business not as high in California• Five
other states have higher overall costs When it comes to the total costs of doing business, California is outpaced by five other states, according to an annual report released Thursday by the Milken Institute. Hawaii, New York and Alaska are the most expensive states for businesses, maintaining the top three spots for the second consecutive Milken Institute “Cost-of-Doing-Business Index.” The three states increased their year-over-year overall costs. A major factor in the rankings is the cost of electricity. California ranks sixth in the Milken study, just ahead of New Jersey and behind Connecticut. The other states in the “top ten” are: Massachusetts (4); Vermont (8); Delaware (9); and Rhode Island in tenth place. South Dakota maintained its position as the least-expensive state for business, decreasing its costs to 30 percent below the national average. Milken’s index measures wage costs, taxes, electricity costs and real estate costs for industrial and office space. The biggest mover in this year’s index was Maine, moving up 11 spots to 17th from 28th, thanks in large part to higher electricity costs, which jumped from 6 percent above the national average in the 2006 rankings to 43 percent above the national average in this year’s rankings. Mississippi, which moved up eight places, also had an increase in electricity costs. Mississippi’s change in its ranking reflects other states’ abilities to contain or even decrease electricity costs during the same period. Of the states that moved down the rankings most, Michigan leads the pack in reining in its costs, moving from 13th place in the 2006 rankings down to 20th. Michigan had a slight increase in all of the rated factors, but dropped down because those states ranked near it had more pronounced increases. Milken says its index indicates each state’s comparative advantages or disadvantages in attracting and retaining businesses. Each state is measured on the five individual categories, and those weighted scores are compiled to make the overall index. Santa Monica-based Milken Institute describes itself as an independent economic think tank. Source: Central Valley Business Times |
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