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Justin Owen, president & CEO of the Beacon Center, praises Farragut for its low taxes, strong education results, and job and population growth, leading it to the top of the Center’s 2011 Business-Friendly Cities rankings. This article originally appeared in Sunday’s Knoxville News Sentinel.   by Justin Owen For the past six years, the Beacon Center of Tennessee (founded as the Tennessee Center for Policy Research) has ranked the state’s 50 most populous cities according to their business climate. The categories we choose reflect cities’ commitment to creating a business-friendly atmosphere based on strong economic vitality and community allure, and free of stifling taxes and restrictive regulatory burdens. Cities with low tax burdens, less regulation, quality education systems and low crime rates fare better at attracting and retaining business than those with high taxes, burdensome red tape, poor schools and high crime. Since people “vote with their feet,” these factors often lead to population and job growth, which more directly signal a city’s commitment to economic strength. Each year, cities are ranked by data compiled and placed into three categories: Economic Vitality, Business Tax Burden and Community Allure. These categories included factors such as job and population growth, tax burdens, household income, cost of living, crime rates and education statistics, all important measures for determining how friendly a city is to business growth. After culling data from various reputable sources, including the U.S. Census Bureau, the FBI and the Tennessee Department of Education, our rankings indicate that the Town of Farragut is Tennessee’s Most Business-Friendly City. The Knox County city has consistently scored high in the rankings due primarily to its low tax burden — it lacks a city property tax and is the only top 50 city that chooses to impose no gross receipts tax on businesses. It also posted strong job performance, a low crime rate and higher than average median income levels, leading it to a first place finish in 2011. Four Middle Tennessee cities round out the top five. Brentwood, Franklin, Mt. Juliet and Spring Hill follow Farragut’s lead with low tax rates and positive job growth over the past year. On the flipside, Memphis finished dead last for the second consecutive year. The Bluff City has consistently failed to address its education woes and has an abhorrently high crime rate. It also imposes a property tax that is nearly 16 percent higher than that of any other city in the state. Other cities ranking toward the bottom posted similarly high tax rates, low income for residents, and low education results. Taken together, these factors can drive away businesses seeking to expand or relocate. Cities that want to attract new business development while also nourishing existing enterprise should follow the lead of Farragut by limiting their tax burdens, addressing crime, and maintaining a quality education system. This will attract new residents and thereby business growth regardless of the overall economic outlook. As Farragut has proven, a city can be business-friendly even during periods of economic malaise. For that reason, the Beacon Center is proud to bestow the town with the honor of being Tennessee’s Most Business-Friendly City in 2011.