QUIZ

Between 1990 and 1996, which three Southern states saw their Gross State Product grow the most?
(Scroll down for answer)

Oklahoma Voters Approve Right-to-Work Law

Oklahoma is the first state in 15 years to pass a right-to-work law. The September election on the right-to-work legislation showed that 54 percent of voters supported the measure. The new amendment means that mandatory union dues are now prohibited in the state. The outcome was a victory for business interests in Oklahoma. The decision makes Oklahoma the 22nd state to enact right-to-work legislation. Thirteen of those states are located in the South.

North Carolina's Budget Woes

For over 40 years, North Carolina has been a model for other states in the U.S. when it came to state fiscal policy. But with a need to find $700 to $800 million in new revenue, the Tar Heel State's reputation is being tarnished. There was even a time this summer when North Carolina officials were expecting its bond rating to be dropped from AAA to AA1. Most states experience cyclical financial problems. But until now, that wasn't the case for North Carolina. What many officials in the state are pointing to is the $1.4 billion in tax cuts given to North Carolinians in recent years. Now, government officials are looking to possibly raise taxes -- most likely sales taxes -- to cover the large budget shortfall. The threat of a bond rating drop has been eliminated for now, however. The state's new budget passed in the early fall convinced all three major bond-rating houses to allow the state to retain its triple-A bond rating. The state's new $14.5 billion budget, which includes more reserves, new revenue and spending cuts, impressed the New York-based rating houses and persuaded them to grant AAA status to North Carolina.

Florida's Budget Shortfall

Florida officials are considering taxing currently exempt goods and services in the wake of a budget shortfall that could approach $2 billion. The drop in tourism and spending in the wake of the September terrorist attacks has many officials in the state finding ways to increase state government revenue. Officials are also resigned to the fact that some existing state programs may have to be cut to solve the Sunshine State's financial problem.

Maryland Surplus Has Pols Giddy

Maryland officials are ecstatic over a large surplus for fiscal year-end 2001. State Comptroller William Schaefer released figures that showed a $538 million surplus, with $191 million actually available after the General Assembly appropriated $347 million for spending in the current fiscal 2002 budget. The bulk of the excess tax revenue came from state income and estate taxes. Sales taxes, on the other hand, came in 21 percent below what Maryland officials were expecting.

In Tough Times, Georgia Stands Out

The state of Georgia has maintained a AAA bond rating every year since 1974. In fact, the Peach State is one of only nine states across the country to get a AAA rating from all three of the major rating companies. The other states are Delaware, Maryland, Minnesota, Missouri, North Carolina, South Carolina, Utah and Virginia. A diverse economy and prudently managed budget surpluses are two primary factors why the state of Georgia stands out in these tough times. Also to be credited is a constitutional amendment that requires that the state's highest annual debt service cannot exceed more than 10 percent of that year's revenues.

Crossing the Line

At a time when the Pittsburgh area is struggling to bring in new business, a neighboring community is thriving. And its success can be attributed to something as simple as the fact that it lies on the other side of the state line. A mere 33 miles due west of Pittsburgh, Weirton, W.V., is rapidly becoming a notable suburb of Pittsburgh, especially when it comes to attracting business. "To tell you the truth, that state line between us and Pittsburgh makes a lot of difference," said John Murray, Director of the Business Development Commission of the Northern Panhandle (W.V.). "The state of West Virginia has been agressively pursuing businesses through the use of tax exemptions, deductions, credits, direct financial incentives and special treatment. Since we're actually closer to Pittsburgh than some of its own suburbs, companies are indeed crossing the line to take advantage of what we have to offer."

Editorial

The People of Tennessee Must Understand That You Get What You Pay For

Tennessee Gov. Don Sundquist has announced numerous budget cuts since the summer, including a $12 million cut in higher education, as a result of a slowing economy and the resulting pressure on state budgets. Once considered one of the South's most fiscally sound state governments (Tennessee is one of only nine states in the country whose governments had top-drawer credit ratings from all of the rating agencies), Tennessee is now faced with an economic crisis, according to Sundquist. The slow economy has reduced revenues dramatically, particular sales tax revenue.

In fact, tax revenue collections dropped again in September, finishing down 1.9 percent from a year ago and $25.9 million below estimates. For the month of September, the general fund was undercollected by $20.5 million, dropping 1.36 percent from a year ago to $543.4 million. Already, overall tax collections in Tennessee are $53.3 million less than estimated for the 2001-02 fiscal year, which began in August.

Tennessee's biggest problem is that nearly 75 percent of its revenue comes from a 6 percent sales tax. That's a tax on goods, not services. There is no income tax in Tennessee, one of the few states left without one (in the South, only Texas and Florida are void of personal income taxes). Income taxes in Tennessee, which used to be an "obscenity" to even discuss according to Sen. Bob Rochelle, a democrat from Lebanon, are now "at least being discussed."

What the people of Tennessee have to understand is that you get what you pay for. For example, the state of Virginia has some of the highest overall taxes in the South. While those taxes are not alarmingly high, they have helped make the state of Virginia the home of the most educated work force in the South. Virginia also features the best secondary education in the South, some of the best roads and health care in the South and, more importantly, is at the top of the economic development game year after year. In order to be at the top and remain there requires a financially sound state government. When will the people of Tennessee realize that another source of revenue is not only needed, it's virtually imperative if the state plans to build on its newly found corporate destination status?

Nissan Moving Maxima Line From Japan to Tennessee

Japan's Nissan Motor Company is beginning to transfer manufacturing operations of its popular Maxima sedan from Japan to its massive plant in Smyrna, Tenn. The Maxima is being remodeled for a 2003 rollout at the Tennessee facility. In 2000, Nissan announced a $1 billion expansion of existing plants in Smyrna and Decherd, Tenn. The Decherd plant makes transaxles and engines. Nissan's Smyrna plant has produced the Altima sedan and small trucks.

Nissan Workers Vote 2 to 1 Against UAW

Workers at Nissan's automotive plant in Smyrna, Tenn., voted 3,103 to 1,486 against organizing under the United Auto Workers. The 2 to 1 margin was roughly the same as the failed unionization vote at the plant in 1989. Nissan produces 400,000 Altima sedans, Frontier pickup trucks and Xterra sport utility vehicles at the 5.2 million-square-foot facility. The UAW has repeatedly attempted to gain a foothold in Smyrna. Since the failed 1989 vote, organizers have unsuccessfully tried to place a unionization vote before workers on two occasions, but had been unable to garner enough signatures to prompt a vote. If the UAW vote had been successful, the Smyrna plant would have become the first foreign-owned automaker with UAW representation.

Maryland Ranked No. 1 Digital State

The Center for Digital Government's 2001 Digital State Survey has ranked Maryland as the nation's No. 1 digital state. The survey showed that Maryland's state government ranked first in the Electronic Commerce/Business Regulation sector with a score of 100 percent. The Digital State Survey assesses the progress state governments have made in using digital technology to improve the delivery of services to their citizens. States were judged on the availability of business information, regulations, forms and online assistance, and the ability to submit required paperwork and payment using the Internet. State of Maryland agencies offer citizens opportunities to conduct business online including driver's license renewal and vehicle registration, business registration and licensing, professional license renewals and licenses for hunting and fishing. In addition, the Comptroller of Maryland was the first in the nation to provide an online registration system for business tax accounts.

Georgia and Gulfstream to Create Jobs

Georgia will partner with Savannah-based Gulfstream Aerospace Corp. to create 200 new jobs over the next six years. The $1.6 million public-private partnership will be conducted through the University System of Georgia's Intellectual Capital Partnership Program (ICAPP). The partnership will support Gulfstream's need for electrical engineers by expediting the education of more than one-fourth of the engineers needed by the company over the next few years. The project will also enable the Georgia Tech Regional Engineering Program (GTREP) to add electrical engineering to its current degree offerings in Southeast Georgia. Partnering GTREP institutions, Armstrong Atlantic State University, Georgia Southern University, Savannah State University and Georgia Tech will offer a combination of credit and non-credit courses, along with industry specific laboratories to help meet Gulfstream's need for electrical engineers. Gulfstream is a full partner in the design of the ICAPP curriculum. Gulfsteam is a wholly owned subsidiary of Falls Church, Va.-based General Dynamics Corp. and employs more than 8,750. The Savannah location is the corporate headquarters and major engineering center with 4,700 employees, making it the Savannah area's largest private employer.

Southeast Top Region for Plant Locations

A survey conducted by the Manufacturers Alliance/MAPI, an Arlington, Va.-based manufacturing research group, shows that the Southeastern U.S. is the favored location for new U.S. manufacturing facilities, with 50% of respondents favoring the region. The top five factors favoring the Southeast included labor costs and quality, proximity to customers, government incentives, transportation infrastructure and regulatory/business climate.

Southern Governors Seek Help For Textile Job Losses

The governors of Alabama, Georgia, North Carolina and South Carolina sent a letter to President George W. Bush recently to encourage him to use his authority to address the problems with the U.S. textile industry. In the letter, the governors of the nation's four largest textile producing states asked the President to deal with the textile industry crisis through the use of existing laws to attack unfair trade practices and end imports from countries that use child labor. The U.S. textile industry has lost more than 60,000 jobs in the past year, including over 25,000 in Alabama, Georgia, North Carolina and South Carolina alone.

Lockwood Greene Certifies Four Alabama Chip Plant Sites

Alabama appears ready for when the semiconductor industry cranks back up again. Lockwood Greene Consulting has certified four sites in the state suitable for new chip plants. All of the sites have what prospective chip plants need, namely access to large amounts of water, low cost electricity and locations near interstates. The certified sites are in Huntsville (400 acres), Montgomery (365 acres), Tuscaloosa (450 acres) and Opelika (1,300 acres).

Greensboro, N.C. Chamber Raises $1 Million In Incentives For Teachers

Offficials with the Greensboro Chamber of Commerce said in September that its education committee had raised more than $1 million in incentives for new teachers in Guilford County. The incentives will be used to attract new teachers to Greensboro. Donated by chamber members, some of the incentives include reduced closing costs on home purchases, computer training, food coupons and reduction of apartment rents. The Chamber raised the incentives in an effort to attract a total of 500 new teachers to Guilford County for both public and private schools.

College System to Expand in Northern Kentucky

Northern Kentucky, which has seen dramatic growth over the last decade, will be the beneficiary of a $30 million plan to expand the region's community and technical school system. The money would be used to fund new education facilities both in rural and metro areas of the region.

Record Crowd at Southeastern Biotech Conference

Biotech is hot in the South. A record number of investors and biotech companies -- more than 350 -- turned out for the third annual Southeastern Biotechnology Conference held in Birmingham, Ala. on October 17. Biotech company officials attended sessions that centered on tools to help process data now flooding from the Human Genome Project and new trends in financing, which have moved to private equity. Other topics discussed the fact that the genomics craze has died down giving way to drug discovery.

Alabama Passes Rural Tax Breaks

Many Southern states have developed tax breaks for companies that locate in distressed counties. But Alabama's new rural initiatives are breaking the mold. The Alabama House has passed legislation that gives tax breaks to companies that employ as few as five people and invest as little as $500,000 to open or expand an industry, warehouse or research center in a poor county in the state. The company would have to pay workers at least $8 an hour to qualify for the tax break. The business must be located in one of two dozen Alabama counties with high poverty and joblessness rates. The uniqueness of the plan is that it is designed to give the very poorest counties in Alabama an opportunity to attract very small businesses.

Southern Markets Do Well in Economic Study

An annual survey that determines which local U.S. economies are the best included five Southern markets in its top 10. The study, conducted by Policom Corp., measures how consistently each market's economy has grown in size and quality over an extended period of time. Taken into account were factors such as per capita income, employment, annual earnings, retail trade, construction sectors, and welfare benefits. The study placed emphasis on communities that had slower, more consistent growth between 1975 and 1999. Markets that had a history of "boom and bust" were ranked lower in the study. Austin, Tex., topped the survey for the third year in-a-row. In addition to Austin, other markets making the top 10 included Dallas, Atlanta, San Antonio and Raleigh-Durham in the South, Seattle, Denver, Salt Lake City and Fort Collins, Colo. in the West and Madison, Wis. in the Midwest.

Tax Incentives Considered in W.V.

West Virginia Gov. Bob Wise's administration is looking to introduce new tax incentives for locating industry before the Legislature ends its 2002 session. Wise has not been specific about his plan, however, business officials in West Virginia have complained about the state's tax structure and high workers' compensation rates.

Pharmaceutical Company Wins Incentives

EMD Pharmaceuticals, Inc. has won over $2 million in incentives from Durham County, N.C. if it decides to locate a new $260 million pharmaceutical plant there. EMD, which is the North American subsidiary of Merck KGaA, is considering Durham and three other sites for a new headquarters and plant that would employ up to 1,200 workers.

Atlanta Ranked No. 1 in Business Owner Diversity

Atlanta is indeed the land of opportunity according to Demographics Daily. Atlanta earned 94.44 points on Demographics Daily's 100-point business-diversity index, designed to measure an area's willingness to extend economic opportunities to all people, regardless of race or gender. Second place was Miami, the only metro earning at least 90 points. Rounding out the top five were Orange County, Ca., San Francisco and Seattle. The survey was based in part after the release by the U.S. Census Bureau this year of 1997 statistics on business ownership by women, blacks, and Hispanics.

Migration to the South

Quick. Which U.S. region has the most people? The title of this magazine probably tipped you off to that answer. But do you know just how many people live in the South? How about 44.5 million more than how many live in the West; 51.7 million more than how many live in the Midwest; and 53.4 million more than how many live in the Northeast. In fact, with a 2000 Census Bureau count of 54,377,978, the Northeast has just about half of the South's 107,736,849 residents.

In 1960, the South's percentage of the total U.S. population was barely 31 percent. Today, it's almost 40 percent. The following chart outlines the South's remarkable increase in population from 1960 to 2000.

Source: U.S. Census Bureau

QUIZ ANSWER

Between 1990 and 1996, the top three Southern states with the highest growing Gross State Products were Georgia (54%), Tennessee (50%) and Arkansas (49%).