North Carolina Climbs to 3rd as Best State for Business Climate, CEOs Say

North Carolina is the third-best state for business, according to a survey of 605 top corporate executives by Chief Executive magazine.

Only Texas and Nevada, which finished 1 and 2, topped North Carolina. Unlike the Tar Heel state, neither has a state income tax. North Carolina ranked fourth in the magazine’s 2007 survey behind Texas, Nevada and Florida and third in 2006.

North Carolina received a “B+” for taxation and regulation as well as work force quality and an “A-“ for living environment in the latest “Best & Worst States” survey. States were graded on taxation and regulation, work force quality and living environment.

Georgia ranked seventh, and South Carolina finished ninth. Virginia took fourth.

The high rating is the latest in a series awarded North Carolina.

Site Selection magazine has ranked North Carolina as the state with the top business environment in six of the past seven years, and Forbes rated North Carolina as the third best state to do business.

Accounting firm Ernst & Young reported that North Carolina has the lowest business tax burden in the U.S. Gov. Mike Easley’s office also noted that Development Counsellors International rated North Carolina second for most-favorable business climate.

“These rankings confirm that North Carolina is the place to be,” Easley said in a statement. “Corporate executives know our state is listening to them, and we know what they need to succeed. We are investing in education to provide a skilled work force, making regulation and permit procedures clear and reasonable and offering a low state and local tax burden. All these, plus our outstanding quality of life, make our state the top choice for companies looking to grow.”

However, North Carolina and Nevada did not escape criticism.

“Though very supportive of low taxes, CEOs criticized the status of the education system in low-tax states and called for improved public school systems and better infrastructure,” the magazine said.

California ranked last and New York next-to-last for the third consecutive year. CEOs were critical of the states' regulatory environments.

“Overall, the message CEOs are sending is that over-taxed and over-regulated states are not conducive to the health of their businesses,” said Ed Kopko, CEO and publisher of Chief Executive Group, which publishes Chief Executive magazine. “This is the message they’ve been communicating since our poll started in 2005.”

The magazine conducted the survey earlier this month.