Report On The States

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I was extremely disappointed with your ranking of Wisconsin as 49th of the 50 states in "overall climate" for small business ("Ranking the 50 Business Climates," October). It seems incomprehensible to me that we would have dropped from 30 to 49 in your rating system in just one year. In fact, I noticed a high degree of volatility in the rankings.

For example, Arizona dropped from 7th to 38th; Delaware moved from 49th to 16th; Illinois went from 33rd to 11th; Indiana from 42nd to 18th; Nevada from 17th to 42nd; and Oklahoma from 9th to 33rd. Using the five categories that you did -- capital, labor, taxes, business activity, and state support -- I cannot imagine how there could be such wide swings among the states within one year.

Wisconsin is committed to being as hospitable as possible to small businesses, because small businesses are the back-bone of America's economy and the biggest source of new job creation. I cannot believe that any sane person -- in or out of Wisconsin -- would accept for a moment the notion that there are 48 other states thnt are better places to do business in than Wisconsin.

EDITOR-NOTE:

Inc. replies: The rankings for the states are based on how the staters perform relative to each other in the five categories Governor Earl mention -- capital, labor, taxes, business activity, and state support. Our criteria for the 1983 rankings were identical to those used in our 1982 state report. The new information came from federal government statics and material furnished by the states themselves. There, were indeed, some major downwards shifts in the rankings, including Wisconsin's. By the same token, there were other states, such as Illinois and Indiana, that moved up. Generally, upward movements were the result of specific initiatives taken by states over the past year to improve their capital resources or through such other actions as the establishment of new small business legislative committees or advisory officeds. Dozens of states have taken such steps. Where there were no new initiatives, the consequence was a drop in the rankings. While the results may seem volatile, our approach was designed to reflect the relative performance of the 50 states.