Study: State Governors Are Making the Tough Decisions on Job Creation, Budgets

Jun 20, 2011

States that have invested in education and infrastructure, reined in onerous taxes and regulation, developed basic industries such as energy, agriculture, and manufacturing, and supported small business and expanding companies are coming out ahead during this tough economy, according to a study released by the U.S. Chamber of Commerce.

“With Washington effectively forced to the sidelines, states will now have to address fundamental economic issues on their own,” said Chamber President and CEO Tom Donohue. “This we know for certain: A robust economic recovery will come from the ground up—from states and cities—and not top down from Washington. The state level is where the rubber meets the road. That’s where the tough decisions are made.”

The 2011 Enterprising States study prepared by the Praxis Group for the Chamber and its public policy think tank, the National Chamber Foundation, looks at five specific policy strategies that states have used and are using now to accelerate growth and create jobs.

  • Entrepreneurship and Innovation
  • Exports and International Trade
  • Infrastructure Investment
  • Education and Training
  • Taxes and Regulation

The top overall growth performers, based on job growth rates, gross state product measures, and personal income growth, are, in order: Alaska, North Dakota, Wyoming, South Dakota, Maryland, Virginia, Oklahoma, Texas, Nebraska, and Iowa.  The study also ranks the top ten states in each of the five categories.

According to the study, states that have invested in new infrastructure such as ports, airports, roads and improved transit tend to have a leg up on others that have failed to do so. For example, Texas’ heavy investment in roads and port facilities is partially credited for the state adding jobs at a much faster rate than other large states.

The report also finds that many states are placing greater importance on flexible, affordable training programs for workers, designed with business input to equip workers with skills needed by local companies. Ohio, New York, Tennessee, Washington and Wisconsin have each established technical institutions separate from community colleges. Tennessee alone has 27 such “technical centers” offering one-year certificates for certain jobs.

Additional findings from the report include the following:

  • States must reduce delays, uncertainty, regulation, and taxes. Uncertainty is the ultimate antagonist of growth, investment, and job creation. 
  • Many states are consolidating, reorganizing, or eliminating agencies, boards and commissions. Special offices and commissions have been established in some states to identify rules, regulations and statutes that are costly, outdated and ineffective.
  • Science- and technology-based economic development and clean-tech initiatives are proliferating amongst virtually all of the states. 

The Enterprising States study was released at a bipartisan summit of governors, state chamber executives, and business leaders at the Chamber headquarters on June 20. Participating governors were John Hickenlooper (D-CO), Bob McDonnell (R-VA), Jack Markell (D-DE), Rick Scott (R-FL), Terry Branstad (R-IA), and Scott Walker (R-WI). The event was broadcast live on C-SPAN2 and was heavily attended by members of the national and local media.

“Governors nationwide understand that any true and lasting economic recovery will only be possible through sustained private sector job creation and investment,” said McDonnell, co-chairman of the event.

“We find ourselves in a situation where the easy choices have already been made and we have to chart a new and more painful course or risk bankrupting this country and crippling future generations. Working together, regardless of political party or industry or personal interest, is key to each state’s future success and the overall prosperity of our nation,” said Hickenlooper, co-chairman of the event.

The summit and study are part of the Chamber’s American Free Enterprise. Dream Big. campaign, which has an underlying goal of creating 20 million new jobs in the next decade.

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