Law Review

State legislatures have been called many things-small-business friendly is usually not one of them. Yet a recent study by Expansion Management Magazine shows that our legislators may be putting last election's issues of welfare, education and crime behind them as they focus on tackling business matters such as workers' compensation, tort reform, industry regulation and wages.

"The [1994] election had a lot to do with social issues," says Jack Wimer, Expansion Management's editor. "And when legislatures change parties, as many of them did, it's natural for social issues to come up early in the session. With many of those issues now addressed, the way is clear for more business-friendly issues."

While traditional areas of business legislation continue to dominate, more states are also exploring innovative ways to create a favorable business environment. "As states become more competitive with each other, they're trying to bring more attention to themselves as a great place to do business," says Wimer. "If they can't afford to lower their taxes, they'll try to figure out another incentive. The trend is definitely toward creating new and innovative ways of attracting [small businesses]. Everybody's got a program, whether it's training here, lower taxes there, or cash grants and lower utility costs in other places."

In its survey of states' "legislative quotients," Expansion Management found Texas hogged the top spot for the second straight year. Thanks to its combination of zero corporate and personal taxes, an effective ratio of bills enacted and reasonable legislative expenditures, "on a sheer dollar-for-dollar basis, Texas is a place where you can actually take home more of the money you make," says Wimer.

Overall, Wimer foresees a trend developing not only in legislative priorities but in the legislators themselves. "[State governments] today are much less dominated by attorneys," he says. "More businesspeople and educators-people who want to create jobs-are getting into legislatures. In the 1997 sessions, we should see a lot more business-related legislation."

This article was originally published in the July 1996 print edition of Entrepreneur with the headline: Law Review.