Cost-of-Living can sink Employment

State legislators tend to think employers are privileged to be able to do business in their state. But the fact is that the decision of location is like any other for a company - cost vs benefit. And recently the CEO of Aetna (based in the state of Connecticut) had some hard words for CT Governor Dannel Malloy.

In short, the Hartford-based health insurer could add workers anywhere around the globe as it grows its health-technology business. Forty percent of Aetna employees today work from home full-time.

"We've done the analysis, and, quite frankly, Connecticut falls very, very low on the list as an environment to locate employees . . . in large part because of the tax structure, the cost of living, which is now approaching, all in, the cost of locating an employee in New York City," he said.

As states consider how to resolve their budget deficits, they need to keep in mind that it is not a problem solved in isolation. Businesses can and will relocate. And it is the best solutions that will keep and gain business tax revenue.