Washington state rated eighth best in the nation in the Small Business Survival Committee’s annual ranking of the states according to their respective policy climates for small business and entrepreneurship in the “Small Business Survival Index 2002.”
According to SBSC chief economist Raymond J. Keating, author of the study released today, “The Small Business Survival Index 2002” compares how government in the states treat small businesses and entrepreneurs. 
Since small business is the true driving force behind economic growth, every state and local lawmaker should be concerned with the well being of small business. 
SBSC President Darrell McKigney added: “Even in good times, half of all small businesses fail within four years, yet these are the very businesses we look to create, on average, three-quarters of all new jobs.  We hope lawmakers and citizens will use this information to evaluate whether their state is friendly or unfriendly to small businesses and job creation.” 
 The “Small Business Survival Index 2002” ties together 20 major government-imposed or government-related costs impacting small businesses and entrepreneurs across a broad spectrum of industries and types of businesses: personal income taxes; capital gains taxes; corporate income taxes; individual alternative minimum taxes; corporate alternative minimum taxes; indexing of tax rates; property taxes; sales, gross receipts and excise taxes; death taxes; unemployment taxes; health care costs; electricity costs; workers’ compensation costs; crime rates; right to work status; number of bureaucrats; tax limitation status; Internet taxes; gas taxes; and state minimum wages.
These measures are combined into one index number—the Small Business Survival Index. 
“The Small Business Survival Index manages to capture much of the governmental burdens impacting critical economic decisions—particularly affecting investment and entrepreneurship—state by state,” Keating said.
 Washington benefits tremendously from imposing no personal income, capital gains, corporate income or added death taxes. 
It also ranks well in terms of health care cost and the number of government bureaucrats. 
However, the state carries the heaviest burden in terms of sales, gross receipts and excise taxes, and also ranks poorly in terms of the unemployment tax, workers’ compensation costs, the crime rate and the gas tax.
South Dakota ranked first in this year’s survey, while the District of Columbia ranked last.
 “The best policy environment for entrepreneurship consists of low taxes, restrained government spending and regulation, and government fulfilling its duty of protecting life, limb and property,” Keating concluded. “This governing philosophy benefits all types of businesses and industries.  When it gets its policy mix right, a state is well positioned to compete both nationally and globally, with policies geared to help economic growth accelerate, incomes increase, and job creation improve.”