Gov. Greg Abbott says Texas is No. 1 state for business, but is it?

Gov. Greg Abbott repeatedly boasts about Texas' business climate and the Lone Star State’s reputation for being not just among the best states for business — but the top state. 

"Businesses large and small have led Texas to be ranked the number one state for business every year that I’ve been governor," Abbott said during his State of the State speech Feb. 16 in San Marcos. 

This is a popular boast from politicians throughout the country. On March 15, Tennessee Gov. Bill Lee said his state was the best state for companies to thrive in due to the strong business climate. In September, Georgia Gov. Brian Kemp said he was honored his state was ranked as the best state by Area Development magazine. 

PolitiFact reached out to Abbott’s office and officials cited the Site Selection Magazine Governor’s Cup as their source. Site Selection is a well-respected business magazine, experts we spoke to said, that has been around since 1954, according to the magazine’s LinkedIn. 

The magazine tracks projects through its Conway Projects Database and a qualifying project has to meet at least one of three criteria, according to Site Selection. They must have an investment of $1 million, create 20 or more new jobs or have at least 20,000 square feet of new construction. 

Texas has won the Governor’s Cup for 11 consecutive years. 

Site Selection awarded Texas the Governor’s Cup based on the "total qualified projects," a March 1, 2023, announcement said. The magazine gives out multiple Governor’s Cup awards. Site Selection awarded Kansas a Governor’s Cup for the total number of qualified capital investment projects per capita. Site Selection ranked Texas No. 7 in that category — down from 2021 when the state ranked No. 6. 

Experts told us Site Selection is a credible source for business rankings. But it is not the only source. CNBC, Forbes, the Tax Foundation and others provide annual rankings of states’ business climate using a number of factors. Several of these rank Texas among the top states year after year. 

But they don’t consistently rank Texas No. 1. 

In 2022, CNBC ranked Texas No. 5 on its list, which considers several factors, from workforce to cost of doing business. The last time CNBC named Texas as the best state for business was in 2018 — the only time it has named Texas the top-rated state in Abbott’s tenure. 

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The Tax Foundation ranked Texas No. 13 in its most recent State Business Tax Climate Index and has consistently ranked Texas outside the top 10. Texas’ best ranking during Abbott’s tenure is No. 11 in 2016. 

"There’s no one measure that can capture everything about a state’s business climate, but there’s no denying that Texas is highly competitive, with low taxes, low regulatory burdens, and a strong economy that attracts many businesses and individuals," said Jared Walczak, vice president of State Projects at the Tax Foundation. "Unsurprisingly, governors across the country tend to highlight the rankings on which their states do the best." 

Richard Alm, a writer-in-residence at Southern Methodist’s University Birdwell Institute for Economic Freedom, pointed out that Texas has always been among the top states as most business friendly. Texas was considered among the best economies under former Gov. Rick Perry. 

"Basically his claim really should be not that he did something to make Texas No. 1, but that he didn’t mess anything up that was already functioning quite well, in terms of the state economy," Alm said, referring to Site Selection’s ranking. 

This is not the first time PolitiFact has fact-checked a governor or top elected official saying their state is the best for business. In 2017, former Georgia Lt. Gov. Casey Cagle, in running for governor, said Georgia was the No. 1 state for business. Cagle cited Site Selection’s list of the states with the best business climate, where Georgia was top-ranked state. PolitiFact rated it Half True. 

Greg LeRoy, executive director of Good Jobs First, a nonprofit, nonpartisan research organization, said there are limitations to Site Selection’s criteria for rankings. He said it’s important to look at more detailed data. Is a state losing jobs or gaining jobs? Are businesses migrating out of the state or into the state? Are businesses expanding or not? 

"All those things matter," LeRoy said. "It’s capturing some information but it’s missing a lot of important events, too."

Abbott said, "Businesses large and small have led Texas to be ranked the number one state for business every year that I’ve been governor."

Site Selection, a well-respected magazine, has awarded Texas the Governor’s Cup for 11 straight years for the total number of "qualified projects." The magazine also awarded Kansas a Governor’s Cup for having the most investment projects per capita, beating out Texas. Other publications and sources have not ranked Texas No. 1 in all the years Abbott has been governor, but they do rank Texas among the top states. 

Abbott’s statement is partially accurate but lacks context. We rate it Half True.