With the recent publication of SBSC's fourth annual "Small Business Survival Index," it is clear that some states work to create a positive policy climate for entrepreneurs-such the best ranked half-dozen of 1. South Dakota, 2. Wyoming, 3. Nevada, 4. New Hampshire, 5. Texas, and 6. Washington-while others fail miserably in such crucial pursuits-like 46. Oregon, 47. New York, 48. New Mexico, 49. Rhode Island, 50. Hawaii, and 51. the District of Columbia.

Recent news of tax cuts emerging from various states is most welcome from the small business perspective.  However, as economic growth pours additional revenues into state coffers across the nation, much of that money is being spent rather than returned to the taxpayers.  Dean Stansel and Stephen Moore report in a new Cato Institute study: "Over the past four years, only about one of every three dollars of unexpected revenue surpluses has been returned to taxpayers."

Stansel and Moore warn: "Unless states begin to cap expenditure growth and cut taxes to reduce the revenue intake of state governments, they may be faced at the end of this expansion with the same massive deficits that created tidal waves of red ink when the 1980s boom ended."

As always, the best policy for the economy and entrepreneurship is smaller government and lower taxes.  Obviously, much more work needs to be done in the states.