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Fact check/Governor Bill Walker says Alaska's "business climate" is ranked fourth in the nation
Fact check: Governor Bill Walker says Alaska's "business climate" is ranked fourth in the nation
October 8, 2015
By Charles Aull
"Alaska's business climate is the [sic] ranked fourth in the country," said Governor Bill Walker (I) in a press release on October 1.
We looked into Walker's statement and found that one organization ranked Alaska's business tax climate as fourth in the nation, but this ranking system looked at only one aspect of the state's overall business climate. Organizations that have ranked Alaska's business climate give it low marks.
Background
Governor Bill Walker was elected on November 4, 2014, defeating incumbent Sean Parnell (R).
He raised the issue of his state's business climate rankings in a press release on October 1, 2015, in which he announced that the International Economic Development Council would be holding its annual meeting in Anchorage from October 4 through October 7.
"Despite our current budget challenges, Alaska's business climate is the [sic] ranked fourth in the country, and we are seventh in the nation for per-capita entrepreneurial activity," said Walker.
Is Alaska's business climate ranked fourth?
We reached out to Walker's press secretary, Katie Marquette, who told us that the ranking comes from the "2015 Business Tax Climate Index" published by the Tax Foundation, a 501(c)(3) nonpartisan think tank based in Washington, D.C.
The Tax Foundation's study ranks all 50 states and Washington, D.C., based on how competitive their tax systems are when it comes to attracting businesses. It compares states "on over 100 different variables" in five areas: corporate taxes, individual taxes, sales taxes, unemployment insurance taxes and property taxes. The organization assigns point values to these variables and uses them to rank states' tax systems.
The study does indeed rank Alaska fourth, but there's a problem. Walker said Alaska's "business climate" was ranked fourth, but the Tax Foundation ranks states based only on their tax systems. Conversely, business climate usually refers to something broader, such as "(1) an overall measure of growth or business health in a region; (2) a set of factors believed to contribute to regional economic growth;" or "(3) an intangible asset in the form of regional reputation for business friendliness and receptiveness to growth," according to a 2005 paper by economists at Iowa State University.
When we looked at organizations that rank states' business climates, we found these definitions to be accurate. Taxation is an important metric, but it is one of several that contribute to a state's ranking.
Forbes, for example, publishes an annual list of "The Best States for Business," in which they consider business costs, labor supply, regulatory environment, economic climate, growth prospects and quality of life. Another organization, CNBC, uses 10 metrics for its annual report titled "America’s Top States for Business." These metrics range from the available workforce, the cost of doing business and business friendliness to infrastructure, education and access to capital. A third organization, Chief Executive, publishes a "Best and Worst States for Business" list that focuses on workforce quality, living environment, regulations and taxation.
In each of these lists, taxation is one of several metrics that organizations use to rank a state's overall business climate. When other factors are measured alongside taxation, Alaska's rank drops significantly.
Chief Executive ranked Alaska 34. Forbes ranked it 38. CNBC ranked it 47.
One possible exception to these rankings is a 2014 list published by the U.S. Chamber of Commerce Foundation. Its "Business Climate Index" looks at lending, the legal environment, taxation, cost of living, and scores from the Council for Small Business and Entrepreneurship's "Business Policy Index." This list ranked Alaska fourth—but only out of 24 states. Twenty-six of them were left unranked. Full metrics do not appear to have been available for all 50 states. Kentucky and Illinois, for example, only have scores for cost of living. Wisconsin only has a score for its legal environment. At least three states have no scores whatsoever. If full metrics had been included, Alaska's ranking could have been lower than fourth. The list is inconclusive in this instance.
Conclusion
Governor Bill Walker said, "Alaska's business climate is the [sic] ranked fourth in the country" in an October 1 press release. His statement was based on a recent study by the Tax Foundation, which ranked Alaska fourth for its business tax climate. But taxation, we argue, is only one aspect of what determines a state's business climate. When you look at other factors that can impact a state's business climate, as several organizations have done, Alaska's rank is noticeably lower.
Launched in October 2015 and active through October 2018, Fact Check by Ballotpedia examined claims made by elected officials, political appointees, and political candidates at the federal, state, and local levels. We evaluated claims made by politicians of all backgrounds and affiliations, subjecting them to the same objective and neutral examination process. As of 2025, Ballotpedia staff periodically review these articles to revaluate and reaffirm our conclusions. Please email us with questions, comments, or concerns about these articles. To learn more about fact-checking, click here.
Sources
State of Alaska, "Press Release: State Welcomes Economic Developers to Alaska," October 1, 2015
Email exchange with Katie Marquette on October 7, 2015
The Tax Foundation, "2015 State Business Tax Climate Index," October 28, 2014
Iowa State University, "Weathering the Storm of Business Climate Rankings," April 2005
Forbes, "The Best States for Business and Careers," November 12, 2014
Forbes, "Ranking The Best States For Business 2014: Behind The Numbers," November 12, 2014
CNBC, "America's Top States for Business 2015," May 27, 2015
CNBC, "America's Top States for Business 2015: Our methodology," May 27, 2015
U.S. Chamber of Commerce Foundation, "Enterprising States Dashboard," accessed October 7, 2015
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