City falls in state business study

The city of Shelbyville has dropped to 38th place in a newly released study determining the business climate of the state's 50 largest cities.

The study, "How Business-Friendly are Tennessee's Cities?" was released Monday by the Beacon Center of Tennessee, which describes itself as "the state's free market think tank."

It scores each city in three categories -- economic vitality, business tax burden, and community allure on a 100-point scale. The Beacon Center was founded as the Tennessee Center for Policy Research, which ranked Shelbyville as 31st in their business climate study last year.

Walt Wood, chief executive officer of the Shelbyville-Bedford County Chamber of Commerce, said he thought that Shelbyville had an "excellent" business climate, citing the level of cooperation between the county and the city in getting industry to come to the community, using the example of Gold River Feed and the efforts to get a rail spur to the firm's location.

Wood said that he is currently working with six existing industries to plan out capital investments that could mean more jobs coming to the area.

Top towns

Farragut, a suburb of Knoxville, was named as this year's Most Business-Friendly City, the first community to receive that ranking twice. The Beacon Center stated that the east Tennessee city lacks a property tax, has a low crime rate, and has witnessed strong job growth compared to other cities.

Brentwood placed second, with the number three ranking going to Franklin, and Mt. Juliet and Spring Hill taking the 4th and 5th spot.

Tullahoma ranked at the top of the bottom five at 46th place, followed by Dyersburg, Martin, Brownsville and Memphis taking last place. The Center said that those cities had the most business tax burden, "particularly their reliance on high property taxes."

Cities and towns also receive a separate score on the three main categories based on business and individual tax rates, job and population growth, median household income, cost of living, crime rates, and a combination of high school graduation rates and ACT scores.

Where we rank

Shelbyville scored 51.4 of an overall 100 points in the overall business friendly ranking, while Farragut received a score of 84.5. The city received a score of 52.2 for economic vitality, a business tax burden of 49.1 and a community allure score of 54.1.

Shelbyville placed 34th in the category of economic vitality, with the score coming from the city's job growth or loss, the residential population figures and Shelbyville's median per capita income.

As for the city's business tax burden, Shelbyville ranked 34th, with business property taxes and gross sales tax receipts used to calculate the ranking.

The city ranked 44 out of 50 in the category of community allure, a figure arrived at through an examination of Shelbyville's cost of living index, individual tax burden, the high school graduation rate and ACT scores, as well as the violent crime rate.

Data used

Due to the economic downturn, the Beacon Center stated that they revised their methodology last year of arriving at the figures, making population and job growth account a larger part of the rankings than in previous years.

Factors that the towns could not control, such as the proximity to interstate highways and commercial airport, were dropped from rankings last year.

The Center stated that local* policy makers who want to make their cities more business-friendly should follow the path of cities like Farragut, Brentwood, and Franklin by "maintaining low tax rates on businesses and families, focusing on education, and eliminating burdensome and unnecessary red tape* that* stifles business growth."

The study used data from U.S. Census Bureau, the Tennessee Department of Education, the state Comptroller of the Treasury, and the Federal Bureau of Investigation, among other sources, to reach their findings.