Rating the Governors

With Arnold Schwarzenegger and 25 other governors up for reelection, we look at who among them has earned the entrepreneurial vote.

1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 NEXT

By now, you are familiar with the backbone metaphor. As in: "Small businesses are the backbone of our economy. We must do everything we can…to make sure they succeed." This particular version happened to be uttered by California governor Arnold Schwarzenegger on March 31 of this year to an audience of Hispanic business owners. But pretty much every working politician in the country has offered up a variation of the backbone metaphor recently. This is especially true among governors, who have a natural affinity for entrepreneurs because they too are executives (rather than legislators) and because they are apt to encounter local CEOs in the conduct of their duties.

With most if not all governors espousing entrepreneurship, it's harder than it used to be to figure out who is truly an ally and who isn't. That's why this year, in time for Election Day, we're rating the governors on how their policies have encouraged business ownership. Early on, we narrowed our focus to the 26 governors who are seeking reelection. The thinking here is that it's smarter and fairer to assess someone on the record he or she has built in office than on campaign promises.

Over the course of several months, a team of reporters has talked to dozens of entrepreneurs, academics, policy wonks, economic development officials, National Federation of Independent Business chapter heads, chamber of commerce presidents, venture capitalists, and (yes) governors themselves to get a sense for which governors have offered the most support to their state's business community.

We judged the governors on several criteria: tax and fiscal policy, work force and economic development, health care, education, and regulation. We also took into account a state's business climate: Is the governor riding high on a strong economy or doing his or her best in an unfavorable environment? We awarded bonus points to good cheerleaders and to those who have come up with imaginative pet projects.

So what did we learn? In broad strokes, the best governors for business are the least partisan. They are often Republicans in traditionally liberal states (Vermont, Minnesota) or Democrats in conservative states (Kansas, Oklahoma). They collaborate with legislators and business leaders to reach consensus even on tough questions. As important, they strike the right balance between making progress on a few key issues--such as workers' compensation reform or balancing the budget--and backing a laundry list of smaller initiatives. Finally, they are consistent. When it comes to supporting small businesses, the backbone of the economy, you might say that the true mark of a friendly governor is that, periodically, he or she shows a little spine.

Alabama

Bob Riley

Republican, age 62

Elected: 2002
Rating:

Before entering politics, Riley built a door-to-door egg sales operation, Uncle Bob's Eggs, into one of the largest poultry outfits in the Southeast. In office, he's generally supported business interests. He has persuaded Alabama's young auto industry to expand and attracted an Airbus factory to the state. He was also among the first governors to protect small businesses by signing legislation to curb the use of eminent domain.

In 2003, Riley's high-profile effort to get the legislature to raise taxes failed, but a strong economy helped him erase the record $650 million budget deficit he inherited. The state now has a modest surplus.

Riley has distinguished himself by trying to alleviate the abject poverty in some parts of the state, which is ultimately Alabama's biggest economic challenge. His Black Belt Commission seeks to increase school funding in rural black communities. He also gave a tax break to the one in five Alabamans who earn less than $12,500 a year.

Arizona

Janet Napolitano

Democrat, age 48

Elected: 2002
Rating:

Janet Napolitano has been both lucky and smart. Arizona's booming economy has created a $1.5 billion state budget surplus, letting the governor create tax breaks for business while preserving key government services and balancing the budget.

1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 NEXT

Try a RISK-FREE Issue of Inc. Today!

Renew | Contact Us | Current Issue

Select Services