Hawaii again tops list as costliest state for business
DATELINE: HONOLULU
Hawaii is the most expensive state in the nation, by far, for doing business, according to a report by the Milken Institute.
It's the third straight year Hawaii ranked No. 1 on the independent economic think tank's annual Cost-Of-Doing Business Index, which measures wages, taxes, electricity costs and real estate costs for industrial and office space.
Hawaii scored 151.5, which meant that the overall cost of doing business in the state was about 52 percent higher than the national average. The score was up from 148.4 in 2006 and 143.1 in 2005, according to the report.
New York (130.9) ranked second, followed by Alaska (130.8) and Massachusetts (130.6), all with costs of doing business about 31 percent above the national average.
Jim Tollefson, president and chief executive of the Chamber of Commerce of Hawaii, said Hawaii's ranking came as no surprise.
"We're doing all we can to improve our ranking," Tollefson added.
Hawaii had the highest electricity and industrial space costs and ranked second in tax burden.
The Milken Institute said its index indicates each state's comparative advantages or disadvantages in attracting and retaining businesses. Those states with a low cost of doing business have, on average, greater job growth than those with high costs.
"I think it's something we're concerned about, and we continuously look for ways to reduce those costs to make it easy for businesses to start up," Hawaii economist Pearl Imada Iboshi said.
Wages in the islands, however, were not the highest. Wages in Hawaii ranked 22, despite the high cost of living.
Maine was the biggest mover on the index, surging 11 spots to 17th largely on higher electricity costs. Mississippi, which moved up eight places to 34, also had an increase in electricity costs.
South Dakota maintained its position as the least expensive state to do business, with costs 30 percent below the national average. Other low-cost states were Iowa, North Dakota, Nebraska, Idaho and South Carolina.
The Milken Institute is based in Santa Monica, Calif.
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The Milken Institute: http://www.milkeninstitute.org/index.taf