Washington Research Council examines the U.S. News No. 1 ranking for Washington: “room for improvement”

The Washington Research Council reviews the U.S. News “best state in the nation” ranking for Washington. We wrote about the rankings here and in this week’s newsletter.

The WRC adds some important observations, particularly about the metrics used for assessing the state’s business environment. 

The Economy category has sub-rankings for business environment (Washington ranks 3rd), employment (20th), and growth (1st). The business environment subcategory includes entrepreneurship (Washington ranks 11th), patent creation (3rd), low tax burden (15th), top company headquarters (26th), and venture capital (5th). For tax burden, U.S. News uses total state and local taxes as a share of state income.

…Washington’s ranking on business environment by U.S. News seems too high. For example, the tax burden measure it uses is total state and local taxes, not taxes paid by business specifically. (As we wrote earlier this year, Washington’s business tax burden is high.) The U.S. News business environment ranking also doesn’t consider Washington’s high unemployment insurance tax rates or workers’ compensation benefits paid (which are part of the Benchmarks).

What you choose to measure and how you actually measure it directly, sometimes profoundly, affect the rankings in exercises like this. As the WRC writes, 

U.S. News says Washington is the best state in America. Of course it is—it’s home. But from a public policy standpoint, that doesn’t mean there isn’t room for improvement.