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How Business-Friendly Are Alabama’s 50 Largest Cities?

In order to excel in an increasingly competitive global marketplace, Alabama must be as attractive as possible to emerging as well as expanding businesses. While Alabama’s business-friendly image is usually assessed at the state level, Alabama’s individual cities must consider how they compare in economic, social, and educational categories that attract new businesses and encourage established ones to remain. The Alabama Policy Institute (API) collected data for Alabama’s 50 most populous cities, analyzed the findings and ranked them based on proven criteria that ensures business success and protects the entrepreneurial spirit. The four categories in which cities are ranked are Economic Vitality, Business Tax Burden, Community Allure, and Transportation Infrastructure. API’s researchers derived answers to the following questions: What cities have the best tax policy? Which have low costs of living and crime rates? What cities have experienced the most year-over-year population and job growth? What type of economic vitality do cities have, including the average incomes for local residents?

API’s Business-Friendly Formula is calculated as follows:

Economic Vitality (35% of overall score):
• Recent job growth (50% of Economic Vitality category)
• Residential population growth from 2010 to 2011(12.5%)
• Population growth from 2000 to 2010, divided by 10 (12.5%)
• Median per capita income (25%)

Business Tax Burden (30% of overall score):
• Business property taxes (70% of Business Tax Burden category)
• Local sales tax (30%)

Community Allure (20% of overall score):
• Cost of living index (35% of Community Allure category)
• Per capita violent crime rate (35%)
• Percent of adults age 25 or older with at least a high school diploma (15%)
• Average SAT 10 scores for 8th grade math and reading (15%)

Transportation Infrastructure (15% of overall score):
• Distance to primary commercial service airport (25% of Transportation Infrastructure category)
• Distance to commercial rail service (25%)
• Distance to port capable of handling container shipping (25%)
• Distance to Interstate Highway System (25%)

Alabama’s most business-friendly cities possess responsible, limited governance, reasonable tax rates, quality school systems, low crime, access to transportation infrastructure, and a thriving economy despite significant economic challenges over the last several years. Local policymakers can improve their cities’ business-friendly status by maintaining low tax rates on businesses and families, focusing on education and public safety, and making sound investments designed to attract prospective businesses. By making simple adjustments, many cities across Alabama could be on their way to becoming Alabama’s Most Business-Friendly City, and in the process, help establish Alabama as a destination for growing companies.

Yellowhammer will over the next week be releasing API’s list of the Top 50 Business-Friendly Cities. The schedule is below.

Wednesday, April 3: 41-50
Thursday, April 4: 31-40
Friday, April 5: 21-30
Monday, April 8: 11-20
Tuesday, April 9: 1-10