Texas, New Hampshire, Utah, Louisiana, and Colorado gave their states the highest rating for friendliness to small business. Small businesses in Manchester, Dallas, Richmond, Austin, and Knoxville gave their cities the highest ratings.
In contrast, small business owners gave California, Connecticut, Illinois, and Rhode Island an “F,” while Massachusetts, Maryland, and New York earned a “D” grade. Providence, New Haven, Buffalo, Albuquerque, and Hartford were the survey’s worst-performing cities as rated by their small business owners.
Small businesses in Texas and Utah have rated their states in the top five every year this survey has run, while California and Rhode Island have been rated in the bottom five every year.
State and city governments that promote local business training and focus on ease of regulatory compliance are consistently perceived as being friendliest to small business.
Professionals who weren’t required to have a license judged their cities and states in a more favorable light; however, respondents who were required to carry a license but said that complying with licensing rules was “very easy” were just as favorable towards their government as respondents who weren’t required to have a license at all.
Entrepreneurs’ perceptions of their tax burdens were among the least important factors in judging governments.
No surprises here. Although if there’s a lesson to take away from these results, it’s that a successful state or city can have high taxes or high regulatory hurdles — but not both.