Florida is No. 2 on Chief Executive’s latest “Best and Worst States” survey, passing North Carolina, which slipped to third.

Texas finished first as it has in each of the eight annual lists.

The list is based on a survey of 650 business leaders, up from 550 participants a year ago.

Why did Florida pass North Carolina?

“Last year, Florida Gov. Rick Scott penned a tongue-in-cheek letter to Texas Gov. Rick Perry, warning him that Florida is coming after the Lone Star State’s top ranking,” Chief Executive reports.

“Since Scott took office, his administration has enacted business tax and regulatory reforms that have contributed to the creation of more than 140,000 private sector jobs and an unemployment drop of 2.1 percentage points last year—one of the biggest decreases in the nation.”

CEOs assigned North Carolina ratings of:

  • 7.09 on taxation and regulation
  • 7.95 on work force quality
  • 8.41 on quality of life

However, the state was criticized for: “Stalled recently on issues including tort reform, school funding and taxes.”

Two CEO comments were listed in North Carolina’s appraisal:

  • “North Carolina appears to have a good balance between taxes/regulation and work environment/resources.”
  • “Texas and North Carolina are easy to work with but NC taxes are beginning to cause us to look elsewhere.”

North Carolina also has a higher average of state employees and a higher tax burden than Florida but did have more gross domestic product growth and a lower average debt burden per resident. 

Florida received scores of 7.27, 6.73, 8.07 respectively in the same three categories of the survey and was praised for: “New tax relief—and boosterish Gov. Scott—excite owners and executives.”

Texas received scores of 8.58, 8.05, and 7.94.

Executives grade states in a number of ares such as tax and regulation, quality of workforce and living environment.

The rest of the top 10:

4. Tennessee
5. Indiana
6. Virginia
7. South Carolina
8. Georgia
9. Utah
10. Arizona

For the full report, read here.