CNBC has had Texas #1 in recent surveys for business opportunity, but the measures used as part of the Opportunity Index - which focus on the factors that impact people, not businesses - place Texas far lower among the states.
This illustrates a few things we cover in 2306, namely the types of public policy priorities in the state and the impact of the state's individualistic political culture on state priorities.
From the Washington Monthly:
The Opportunity Index ranks states based on sixteen indicators that Measure of America codirector Kristen Lewis says are essential to the “infrastructure of opportunity” for individuals. These indicators include not just the basics—the availability of jobs, affordable housing, and quality education—but also what a growing body of research shows is critical to upward mobility: social capital and civic life. These factors make up, at the individual level, the equivalent of the “business-friendly” environment that company-focused rankings measure.
The outcomes under the Opportunity Index approach, needless to say, are radically different from those of CNBC. Under the 2013 Opportunity Index, Texas—top ranked in opportunities for business by CNBC—ranks thirty-eighth in opportunities for people. Meanwhile, Vermont, which invests nearly double what Texas does per pupil in K-12 education ($15,096 versus $8,562), ranks first on the Opportunity Index and thirty-second by CNBC.
. . . While some structural differences—such as the level of church membership—are less susceptible to public policy, federal, state, and local policy choices can have profound impacts on whether people have access to the building blocks of upward mobility: decent schools, safe streets, and even access to grocery stores with affordable healthy food. In some neighborhoods of Houston, says a report by Children at Risk, “areas as large as 10 miles have been identified as containing a single food source—gas stations that sell tobacco, alcohol and fatty snacks.” As a tragic—but unsurprising—consequence, as many as 47 percent of Harris County children are obese or overweight.
In the same way that the rankings of the U.S. News & World Report have influenced—for better or for worse—the investments and choices that colleges have made to improve their standings, it’s likely that the multiplicity of business-focused rankings have skewed the policy choices of states eager to attract companies within their borders. Texas, for example, spends $19 billion a year on tax incentives to woo companies to the state, according to the New York Times—at the same time, it cut education spending by $5.4 billion last year. In the last legislative session, Texas lawmakers passed yet more tax cuts, exempting small businesses from franchise taxes, lowering franchise tax rates, and creating a special tax break for data centers doing business in the state. Texas was also among the first states to develop a so-called war chest—the Texas Enterprise Fund—aimed at offering companies incentives to move to the state, along with a smorgasbord of other goodies, including grants and low-cost loans to businesses.
