RAPAPORT... The Claremont McKenna College’s Rose Institute of State & Local Government ranked the most expensive and least expensive cities in the U.S. for its 17th annual Kosmont-Rose Institute Cost of Doing Business Survey. Analysts gathered business fees and tax rates from 421 selected cities across the U.S. and ranked them into one of five “Cost Ratings” groups: Very low cost, low cost, average cost, high cost and very high cost. (View all the cities on a Google Map from this link.)
''The survey is known as a ‘tie-breaker’ for companies contemplating a move or an expansion,'' said Larry Kosmont, the president of Kosmont Companies. ''It serves the firm that has already determined the best combination of factors important to it, such as the quality of the labor force, the cost of housing, and the proximity to their suppliers and customers. There is often a handful of side-by-side cities in a market area that meets these criteria for a given company. That’s when city-imposed fees really make a difference and information in the survey can be a cost and time saver.''
The top 20 "most expensive" cities, in alphabetical order, included:
Akron, Ohio Beverly Hills, California Birmingham, Alabama Chicago, Illinois Cincinnati, Ohio Clarksburg, West Virginia Columbus, Georgia Culver City, California Los Angeles, California Mobile, Alabama Naperville, Illinois New York, New York Newark, New Jersey Philadelphia, Pennsylvania Portland, Oregon Richmond, Virginia Saint Louis, Missouri San Francisco, California Santa Monica, California Toledo, Ohio
The 20 least expensive cities were:
Austin, Texas Abilene, Texas Fort Worth, Texas Cheyenne, Wyoming Eugene, Oregon Yakima, Washington Kent, Washington Everett, Washington Vancouver, Washington Federal Way, Washington Olympia, Washington Corpus Christi, Texas Reno, Nevada Spokane, Washington Centennial, Colorado Overland Park, Kansas Houston, Texas Sioux Falls, South Dakota Bellevue, Washington Gresham, Oregon
Kosmont-Rose found that all of the least expensive cities were located west of the Mississippi River, with five cities in Texas and eight in the state of Washington and also that 17 of the top 20 were in states without income tax.
The Cost of Doing Business Survey determined of the 20 most expensive cities, six were in the Midwest, five were in California, four in the Northeast, four in the Southeast and one in the Pacific Northwest.
High business license fees were the primary reason that cities ended up on the list of most expensive. Fifteen of the 20 most expensive cities assess business taxes based on either gross receipts or general profit. With that formula, those taxes a business pays to a city have the potential to increase rapidly. Nineteen of the 20 cities impose a business license fee of more than $10,000 a year on medium-size retail businesses. Of these 19 cities, seven have fees between $100,000 and $175,000, Kosmont-Rose found.
There was a similar pattern for the property tax rates of the 20 most expensive cities too. All of the rates were higher than 1 percent, with 12 of the cities having rates higher than 2 percent. In comparison, the majority of the cities included in the survey have property tax rates hovering just above 1 percent. New York and Chicago were the ignoble leaders with rates of 4.64 percent and 4.63 percent respectively, with Newark third at 3.18 percent.
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