For a state that has the highest ratio of entrepreneurs, Montana does not rank well in how it treats those entrepreneurs, and the impacts of those policies are far reaching for every citizen. Montana ranks 32nd in the 21st annual ranking of all states by the Small Business and Entrepreneurship Council (SBE), regarding policies which impact the success of entrepreneurship in their state. Montana's ranking has varied little over recent years.The most entrepreneur-friendly states under the "Small Business Policy Index 2017" are:
3) South Dakota,
In contrast, the policy environments that rank at the bottom include:
40) Rhode Island,
48) New York,
49) New Jersey,
"In the end, the greater the governmental burdens - via taxes, regulations, spending, debt, and failures to adequately execute the essential duties of government - the greater the negatives for economic risk taking, small businesses, and the state's competitiveness and attractiveness," explains Raymond J. Keating, SBE Council's chief economist and author of the study
Five new measurements were added in the 2017 Index including: annual fees on LLCs, health care open access, paid leave mandates, and civil asset forfeiture.
Whether a state has policies friendly to business matters, not to just business success, but it is also important to the quality of life in the state. It impacts whether there are adequate earnings, jobs, opportunities, and revenues for amenities that improve the standard of living. A comparison of population growth, economic vitality and the standard of living of the states that are consistently at the top of the ranking to those at the bottom, tell the story.Keating observed, "Economic growth and population growth are faster in the top half of the states compared to the bottom half. In terms of people moving among the states, those ranking in the bottom half on the Index lose significant population to the states ranked in the top half."
"Perhaps most telling is net domestic migration it captures people voting with their feet." From 2010 to 2015, the top 25 states netted a 2 million increase in population at the expense of the bottom 25 states, which lost 2.03 million (with the District of Columbia's gain explaining the difference).Those states at the top had economic growth that was over 29 percent faster than those at the bottom from 2011 to 2014.The top 25 state averaged double the population growth at 4.9 percent compared to only 2.5 percent growth for the bottom 25 states. The lower the score in the policy index the better. So Nevada with a score of 44.789 is on the top because California, at the bottom, scored 138.376. Montana had a score of 89.771, while third- ranking South Dakota, which has often come in first place, had a score of 48.445 and Wyoming in fourth place had a score of 51.862.
SBE Council President and CEO Karen Kerrigan said: "As we have been saying policy matters when it comes to starting up, operating and investing in a small business. That is the case at all levels of government - federal, state and local. Getting policy right makes a big difference in terms of boosting a state's economy, job creation and competitiveness. Many governors and state legislatures have taken this reality very seriously, and have implemented reforms that reduce the burden of taxes and regulations on small business. These policy doers have reaped the rewards. In addition, the best states understand that doing nothing can lead to an erosion in their competitiveness, and have also acted accordingly." Montana would be ranked considerably lower if it were not for its 2nd place ranking and low scoring when it comes to sales taxes. Exceeded only by Oregon, Montana has a score of .868 compared to bottom dwelling Hawaii at 6.25. For sales tax on gasoline Montana ranks 23rd and for diesel 25th.
The fact that Montana is in 6th place when it comes to the level of government debt, must also have a buoying effect. In terms of personal income tax rates Montana ties with Arkansas in 37th place; 23rd in individual capital gains tax; tied again with Arkansas at 36th for individual dividends and interest tax rates; 29th for corporate income tax rates; 30th for corporate capital gains tax rates; 37th for state and local property taxes. In unemployment tax rates Montana ranks 42nd; for wireless tax Montana ranks 4th; 28th for energy regulations; 40th for workers compensation costs; 38th in terms of government employees; 40th in government spending; 44th in revenue from the federal government; 26th in terms of crime rate.nMost people do not realize the staggering number of restraints and burdens with which business owners must deal.
The "Small Business Policy Index 2017" ties together 55 major government-imposed or government-related costs impacting small businesses and entrepreneurs across a broad spectrum of industries and types of businesses: personal income tax, capital gains tax, dividends and interest, corporate and other kinds of income taxes and income tax rates on businesses and individuals, property taxes and sales taxes, death taxes and unemployment tax rates, internet taxes, gas taxes, fees imposed by government, health savings accounts, energy regulation, workers' compensation costs, right to work laws (which has to do with whether workers are forced to become union members), state minimum wage, paid family leave, sick leave, policing of immigration which has been imposed on businesses, lawsuit reform, risks of liability, consumer protection litigation, regulatory flexibility, insurance regulations, healthcare management, number of government employees, level of government spending, level of revenue of federal government, private property rights, civil asset forfeiture, state laws governing crowdfunding, highway cost efficiency, education levels, crime rates.