Texas Ranked First In The Nation For Business Climate

AUSTIN, TX — Texas has been named the state with the best business climate in the nation, according to a trade publication noting its penchant to provide tax incentives to lure industry.

Business Facilities magazine on Wednesday released its rankings, ranking the Lone Star State at the top of a list assessing how receptive states are to business. "It should come as no surprise that Texas, BF’s 2019 State of the Year, stands atop the leaderboard in our flagship Best Business Climate ranking," researchers wrote in a summary.

In snagging the top spot, Texas clinches a fourth consecutive top award for how conducive its climate is to business, analysts noted. "The same factors that propelled TX to its record fourth SOTY award were in play when we tallied up the advantages of doing business in the Lone Star State," the study's authors wrote. "Texas has established its hegemony in an impressively diverse array of growth sectors. A rapidly expanding skilled workforce, solid infrastructure, readily available renewable energy and a vibrant innovation ecosystem are just a partial list of the must-haves TX puts on the table for corporate site selectors evaluating locations for their next project."

Related stories:

• Travis County Commissioners Approve Tesla Tax Incentives
• Del Valle ISD Approves Tesla Economic Inducements Package
  
• Tesla Seeks Tax Breaks For Potential Austin-Area Plant
  
• Tesla To Build $1B Automaking Plant In Austin

Distinguishing Texas from other states is its willingness to provide financial inducements to spur corporate relocations, the study noted. The findings come on the heels of electric carmaker Tesla announcing plans to build a plant in the eastern part of Travis County — a deal that was sweetened with tax abatements from the Del Valle ISD taxing jurisdiction and Travis County Commissioners Court.

"If that’s not enough to beat the competition, our friends in Texas will see your offer and raise it with lucrative incentives," researchers explained. "When the governor reaches for the big chips in the Texas Enterprise Fund, it’s usually time for the other folks in the game to fold ‘em."

Travis County approved tax breaks valued at some $14 million over a ten-year period in luring Tesla in exchange for the company's commitment to build a 5-million-square-foot, $1.1 billion carmaking plant said to eventually create 5,000 jobs. The deal is on a sliding scale, with the property tax bill amount lowering further depending on the level of investment. For its part, Del Valle ISD officials approved a ten-year tax abatement deal valued at more than $46 million.

The deal did not go unnoticed in the trade magazine's reckoning: "Just about all of the advantages cited above were in play this month when Austin landed the most coveted project of the year to date: the gigafactory that will produce Tesla’s new Cybertruck, Semi truck and Models 3 and Y," researchers noted.

"According to reports, this mega-site selection decision came down to two finalists, Austin and Tulsa, Oklahoma," researchers recapped. "When Travis County, TX (and the local school district) agreed to pony up more than $65 million in tax rebates over 10 years, the deal was sealed."

Rounding out the top five on the publication's business climate leaderboard are Virginia, Tennessee, Alabama and North Carolina, respectively.

The state's top ranking prompted a response from Gov. Greg Abbott: "Texas has built an unmatched economic environment that allows businesses to grow, innovate, and create more jobs for Texas workers," he said in a prepared statement. "We have shown repeatedly that the Texas model of low taxes and smart regulations combined with our top-notch workforce is a winning formula for economic prosperity."

The governor hinted at future corporate expansion efforts, particularly amid doldrums of the coronavirus that has had corrosive effects on the state economy: "As we respond to COVID-19 and revitalize the economy, we will continue to focus on strategies to attract more employers to our state and create economic opportunity for every Texan," Abbott said.

Business Facilities is a self-described national publication that has been the leading location source for corporate site selectors and economic development professionals for more than 50 years.