As governor of South Dakota, I have made economic development one of my top priorities, and I'm proud to say that our efforts are paying off.
While we have long strived to make our state the best place to do business, prominent groups across the country are beginning to notice.
In April, the U.S. Chamber of Commerce named South Dakota number one for its business climate. Also, the Small Business and Entrepreneurship Council recently ranked South Dakota number one in business policies and entrepreneurial friendliness. We're also in their top spot for small business survival. Our low debt, well-funded pension, and lack of expensive state-funded programs lands us at the top of Barron's Best Run States in America as well.
South Dakota has a long history of stability and balanced budgets. In fact, the South Dakota Legislature has balanced our state's budget every year since we became a state in 1889. We don't do it with accounting gimmicks, either. We don't push one year's expense into the next. We don't use one-time windfalls to fund ongoing expenses. We never issue general obligation bonds. And we don't raise taxes. In turn, businesses have found that our stability and history of fiscal responsibility, coupled with our stellar tax climate and reasonable regulations, have created an ideal ground for business success.
In South Dakota, we have no corporate income tax, no personal income tax, no business inventory tax, no personal property tax, and no inheritance tax. This puts more money in the pockets of our businesses and citizens, creating a more favorable environment for growth.
Additionally, we work hard to ensure that our regulations and laws are reasonable. From firearms to financial services, eliminating red tape has served as a cornerstone of our pro-business climate for decades.
For example, in the early 1980s, recognizing our favorable legal and regulatory framework, Citibank moved its credit card bank to South Dakota. Others followed suit, and in recent years many have made South Dakota their home charter location. Today—as a result of our favorable regulatory climate—our total bank assets topped $2.6 trillion. This sum comprises 18 percent of the country's total bank assets and landed South Dakota at the top of the chart in 2012, according to the Federal Deposit Insurance Corp.
Things are just as impressive when it comes to actually doing business in South Dakota. The costs of doing business—utility costs, unemployment insurance costs, workman's compensation costs, land costs, labor costs—are low. Productivity of our workers is high. In fact, many multistate employers with locations in South Dakota tell us their South Dakota location is their most productive.
We are a small state with approximately 830,000 people. Still, because we are small, we are able to offer amenities that other states simply can't match.
South Dakota has some of the best public/private partnerships around. People know each other and connections are made easily. Every day, we see relationships forming among our industries' leaders, private enterprises, community organizations, state universities, and other stakeholders.
Currently, we have five research centers that collaborate with companies like Sanford Research, Avera Research, HF Webster, Secure Banking Systems and a multitude of manufacturing firms. As a result of these partnerships, South Dakota has seen increases in federal funding, start-up businesses and in-state company expansions, which just reinforces that we are a great place to conduct business.
What's more, our public officials—myself included—are easily accessible and available to address questions and concerns. We do our best to connect our business leaders to the right people, right away.
Now that the recession is behind us, many states are starting to balance their budgets. But many of those other states have long-term liabilities—unfunded pension obligations and large general obligation liabilities. In South Dakota, we have neither of those things. Our state's pension fund is 100 percent funded. Other states will eventually be forced to confront to those liabilities—probably at the expense of entrepreneurs and businesses.
Thanks to our history of fiscal responsibility, it is likely South Dakota will continue to be the place to do business. Businesses plan for the long term. When considering moving or expanding, they need stability and certainty. They need to know that government won't get in their way. That's what we can offer here in South Dakota.
Our economic development website, www.sdreadytowork.com, is full of information on the how-to's, the rules, and the advantages of doing business in our state. If you would like to learn more about South Dakota, please take the time to visit and contact us with questions!
—By South Dakota Gov. Dennis Daugaard
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