Only two states -- Idaho and Wyoming -- reported they had none of the programs INC. was looking for.

Lobor: Productive Workers Spur Wyoming

1. Wyoming

2. Nebraska

3. Colorado

4. Utah

5. Idaho

6. North Dakota

7. Vermont

8. Arizona

9. Florida

10. New Hampshire

The best employees are rarely the ones willing to work for the lowest pay. Looking beyond their weekly payroll, managers of growth-minded small companies usually seek well-educated and productive workers.

In comparing the states, INC. analyzed wage levels and union activity but also examined data on education (the percentage of the work force over the age of 25 with high-school degrees) and productivity (defined as the amount each worker added to the value of manufactured goods).

Of the top states, only North Dakota, New Hampshire, and Florida have fairly low wages. In fact, three of the highest-ranking states in the labor category -- Nebraska, Colorado, and Arizona -- feature average weekly wages for manufacturing workers above the national median of $331. Utah, Colorado, Nebraska, and Wyoming all benefit from an educated population. In each case, 73% or more of the residents over the age of 25 hold high-school degrees. And Wyoming has another factor in its favor. Reflecting the state's mining-based economy, Wyoming's workers are second only to Louisiana's in the value they add to what they make. The average worker added about $59,000 per year to manufactured goods, compared with the national median of $36,880.

Taxes: New Hampshire's Tax Man Takes the Least

1. New Hampshire

2. Missouri

3. Indiana

4. Ohio

5. Florida

6. Arkansas

7. Tennessee

8. Alabama

9. Texas

10. Virginia

Nobody likes to pay the tax man. While examples of companies actually leaving a state because of taxes are rare, the level of state and local taxes that businesses and individuals must pay nevertheless influences business attitudes about where to expand and grow.

Because it is almost impossible to directly compare various types of business taxes among states, INC. followed the advice of tax experts and focused strictly on the overall levels of state and local taxes as related to each $1,000 of personal income. According to this measure, New Hampshire's tax rate of $87 per $1,000 is the nation's lowest, followed by Missouri at $88. Indiana, which had the lowest taxes last year, and Ohio both had rates of $92.

Alaska's tax rate of $500 is the highest, but that figure is misleading. Almost all of the state's revenues are derived from large energy companies, so others pay little or no taxes at the local and state levels. In New York, the state with the second highest taxes, individuals pay $158 per $1,000, followed by Wyoming ($155), New Mexico ($140), and Hawaii ($138).

Underscoring the greater importance of other factors, only 2 low-tax states -- Texas and Florida -- appear in the top 10 overall. But 3 states with comparatively high taxes -- New York, Massachusetts, and Minnesota -- rely on other strengths to reach high ranks in the INC. survey.

Business Activity: Income Gains Bolster Colorado

1. Colorado

2. Texas

3. Florida

4. Oklahoma

5. California

6. Georgia

7. Alaska

8. New Jersey

9. Arizona

10. New Mexico

General business activity within a state can mean big opportunities for both existing and new small companies. A rising economic tide may not lift all the boats but the chances are usually better than they are when things are sinking.

The INC. study doesn't give as much emphasis tobusiness activity as it does to capital resources and state support of small business -- two factors over which states wield more control. Nevertheless, 5 states with comparatively strong activity -- Colorado, Texas, Florida, California, and New Mexico -- also climbed to the top 10 overall. In each case, a strong showing in this category leveraged other strengths. Colorado, for instance, saw healthy population gains (5.3%) and employment increases (6.2%) between 1980 and 1982 and has also been fertile ground for fast-growing small companies, as measured by the annual INC. 100 listing. It was also in the top 10 for capital and labor.

For three states -- Oklahoma, Arizona, and Alaska -- strong performance in the business-activity category still led to overall rankings in the lower half.