Newspaper article THE JOURNAL RECORD

OK Loses Ranking According to the Small Business Survival Index

Newspaper article THE JOURNAL RECORD

OK Loses Ranking According to the Small Business Survival Index

Article excerpt

A new report comparing states based on how friendly their policy environments are for small companies ranks Oklahoma 30th in the nation, a decline of three spots in the past year.

That has local business officials worried.

The fact that we are moving down in the 'Small Business Survival Index' should scare our political leadership, said Matt Robison, vice president for small business at The State Chamber. We must send legislators to the state Capitol that understand small business issues and what needs to be done to help them.

The Small Business Survival Index 2004, produced by the Small Business & Entrepreneurship Council, attempts to quantify if state policies impose unreasonable costs on the business community.

What the 'Small Business Survival Index' seeks to expose is whether state and local governments turn out to be a plus or a minus when it comes to entrepreneurial decision-making, said SBEC Chief Economist Raymond J. Keating, author of the study. Specifically, just how weighty are the costs that elected officials impose on entrepreneurs, small businesses and their employees state by state?

Oklahoma ranks 30th in the nation in terms of having a friendly policy environment for entrepreneurs, compared to 27th last year, according to the Small Business Survival Index 2004.

Two states that border Oklahoma received lower rankings in 2004: Kansas placed 31st on the index and New Mexico was ranked 36th.

How the states rank on the 'Small Business Survival Index' has a real effect on the economy, Keating said. For example, population growth has been much faster overall in states ranking in the top half on the index, compared to those in the bottom half. In fact, from 1995 to 2002, more than 2.5 million people net moved from the 25 states and District of Columbia that rank in the bottom half to those 25 in the top half. Job growth also was faster among the top 25 states. Finally, looking at average annual growth in personal income from 1993 to 2003, of the top ten fastest-growing states, eight fell into the top half on the Survival Index, while of the ten slowest states, seven ranked in the bottom half of the index.

The report examined several issues that impact businesses.

For example, Oklahoma's top personal income tax rate - 7 percent at the time the index was compiled - was higher than all but 15 other states and tied with South Carolina. However, the rate has since been cut to 6.65 percent, which would have improved Oklahoma's ranking in the survey by three places to 32nd this year.

Oklahoma's capital gains tax rate - 7 percent at the time, but 6.65 percent today - was higher than the rate in 38 other states and would still be higher than the rates in 37 states today.

However, Oklahoma's top corporate income tax rate was lower than the rate in most states, ranking 15th lowest in the country.

State and local sales taxes (as a share of personal income) in Oklahoma were higher than all but 19 states, ranking 31st (in order from lowest to highest tax burden). …

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