Which states are best for business? Tennessee boasts low taxes, regulations but study says quality of life suffers

Virginia this year is celebrating 50 years of touting its promotional campaign that "Virginia is for Lovers."

But the commonwealth is also best suited for business, according to a new national ranking of the business climates of all states.

Virginia moved into the top spot in a ranking of the "Best States for Business" released Wednesday by the financial cable news network CNBC. Amazon recently chose northern Virginia for its second headquarters, citing the state's highly ranked workforce, schools and business-friendly regulations. Despite its relatively high cost of living and doing business, CNBC echoed Amazon's assessment of the state.

The other top five states in the new CBNC list came from all corners of the country as determined by more than 60 measures of growth, competitiveness, workforce and infrastructure quality and the cost of doing business.

Georgia ranked No. 6 and Tennessee again placed 13th among the 50 states.

Despite a favorable economy and infrastructure, Tennessee was judged to be the third worst state for quality of life and remained below average for its workforce quality and education.

"A great economy and solid infrastructure are aligned with smart business," CNBC judges said in their assessment of Tennessee. "But quality of life needs a leg up."

Alabama ranked 37th with the second worst quality of life of any state behind only Arkansas.

Tennessee, Alabama and Arkansas scored poorly with above-average crime rates, lower quality health care and less healthy living patterns.

Tennessee Gov. Bill Lee said the Volunteer State continues to attract businesses from around the globe and from other states, including five companies that have relocated or announced plans to soon move to Middle Tennessee from California, along with seven San Francisco companies that have opened offices in the Nashville area in the past five years.

In response to last month's decision by Mitsubishi and Pilot.com to relocate offices from California to Tennessee, Lee posted a video on his twitter account touting Tennessee's appeal to many West Coast companies.

"It is a beautiful day in Tennessee, but I gotta tell ya, as governor, today, I'm California dreaming," Lee said as he laughed while standing outside the state Capitol building.

During the groundbreaking for the new Red Wolves stadium in East Ridge this week, Lee said "we should all be proud of where we are in the economy in Tennessee" and he vowed to keep up the pitch for more new businesses, including another trip planned this month to California.

"We want companies to come to Tennessee and this is a very attractive state for businesses to locate," he said. "We're a low-tax state and we have a real strong business-friendly environment with low regulations. That's why companies leave states with high taxes and high regulations and come to places like Tennessee."

Lee said the defeat of the United Auto Workers at the Volkswagen plant in Chattanooga last month continues Tennessee's tradition as a state with less union influence and a more business-favorable climate. Lee told VW workers before last month's VW vote that he thought "the best way for workers" was to have an open, non-union shop where workers talk directly with their bosses. Subsequently, VW production workers in Chattanooga voted 833-776 against joining the UAW.

"It's clear that states that have a lower level of union activity have a higher degree of recruitment," Lee said. "Companies are more likely to come to states that have a lower level of unions. From an economic standpoint, that 's good for Tennessee."

Among the top 10 "Best States for Business" by CNBC, three had a lower share of unionized workers than Tennessee (Utah, Virginia and Georgia) but the other seven had higher rates of union membership than did Tennessee.

Contact Dave Flessner at dflessner@timesfreepress.com or at 423-757-6340.