Georgia and Tennessee are the best states in the country for business, according to a new ranking by site consultants and editors of Area Development magazine.
In its annual feature on "Top States for Doing Business," the trade publication ranked Georgia as the No. 1 state for the ninth consecutive year. Neighboring Tennessee moved up in 2022 to the No. 2 position, while Alabama ranked No. 6 as Southern states continued to dominate those states identified as the best locations for new and expanding business.
The prime reason for the Southern advantage has to do with costs, according to Area Development Editor Steve Kaelble.
"It's worth noting that of the 10 states that lead our overall list, all but two are also atop the rankings for their overall cost of doing business," Kaelble reported in the new issue. "Georgia, in fact, is the cost leader yet again, the third year in a row. Tennessee moves up to the second slot, and South Carolina rises to third. It's probably not surprising that the list of business cost winners is made up of largely the same players from one year to the next, albeit with some shuffling of the order."
In 2018, Georgia adopted legislation to cut its corporate income tax rate and the Peach State also is generous with tax credits and exemptions for business, Kealble said. Georgia also boasts what Kealble said are "highly regarded training and development programs" along with being home to the world's biggest and busiest airport and one of the biggest seaports on the East Coast.
Tennessee, meanwhile, boasts the lowest state and local taxes paid per capita in the country with no personal income tax and brags that it is within a day's drive of 60% of the U.S. population.
"Business costs are helped by its right-to-work status, too," Kaelble said in his description of Tennessee.
For the third year in a row, Area Development ranked Tennessee the No. 1 state for both its site-readiness programs and its energy availability and costs. The Tennessee Valley Authority, which supplies electricity to most of Tennessee and parts of six neighboring states, including Georgia, provides power cheaper than more than 75% of the other major U.S. utilities.
The consultants surveyed by the magazine also ranked Tennessee third in business incentive programs.
Stuart McWhorter, the commissioner of Tennessee's Department of Economic and Community Development, said Tennessee's top rating for sites and energy reflects a number of key advantages for the Volunteer State, "including a business-friendly climate, central location, highly-skilled workforce and exceptional quality of life."
McWhorter said those advantages are paying off in new development and prospects for the future.
"After having a remarkable year in 2021, we were able to carry that momentum into 2022 and have landed more than 80 projects, representing 11,300 job commitments and $4.4 billion in capital investment," McWhorter said in a statement prepared during the governor's annual economic summit this week in Nashville. "We are thrilled to be named the No. 2 state in the nation for doing business and look forward to continuing our work to make Tennessee the top destination for companies around the globe."
While Tennessee and Georgia boast the best business environment in the view of site selection consultants, the two states both rank among the bottom 10 in another recent study on inequality and conditions for workers.
Oxfam, a global organization that advocates for worker rights to fight poverty, ranked Georgia as the worst state and placed Tennessee as the 10th worst state in its most recent ranking. The Oxfam rating was based on the states' wage laws, work rules and labor protections.