Top 5 states for business

While the state improved or stayed the same in 7 of 10 categories, it stumbled in three important ones: cost of doing business (33rd this year versus 30th in 2010), quality of life (32nd, down from 29th), and most notably economy, where the top-ranked economy four years in a row plunged to 14th this year on the weight of a nagging budget crisis.
The state has been struggling to close a $13.4 billion budget gap for the 2012 fiscal year – one of the worst in the nation as measured by the nonpartisan Center on Budget and Policy Priorities. Texas adopts its budgets two years at a time, and the 2011 legislative session has been a gut-wrenching affair. While Gov. Rick Perry and the state legislature have so far managed to avoid raising taxes or dipping into the state’s rainy day fund for 2012-13,the crisis is forcing severe cuts in state services, including education. But that’s not the only area where the Texas economy has suffered. Texas no longer leads the nation in Fortune 500 companies headquartered there. In fact, the state comes in third, with 51 major companies headquartered in Texas compared with 57 last year. Some of that is the result of mergers, like Fort Worth-based Burlington Northern Santa Fe being acquired by Nebraska-based Berkshire Hathaway and Houston-based Continental Airlines merging with Illinois-based United.
But other Texas companies simply saw their fortunes decline, like Dallas-based Blockbuster and Irving-based industrial equipment-maker Flowserve.Nonetheless, Texas remains a business powerhouse. It remains tops in infrastructure and transportation, and ranks fourth in technology and innovation. And a surge in investment helped Texas jump to fourth place in access to capital from seventh place in 2010.