Nearly a quarter of Washington employers are weighing a move out of state, almost triple the rate from just months earlier, according to a spring 2026 survey cited in a new report from the Washington Policy Center. The analysis, published this week, argues that Washington's ninth-place finish in U.S. News & World Report's Best States rankings masks a business exodus driven by rising taxes and regulatory costs. While the state scores well on quality-of-life measures, the report warns that outdated data and methodological choices obscure a crumbling economic foundation.
The U.S. News ranking weighs quality-of-life factors at 87% of the total score, with the economy category accounting for just 12.88%. Washington ranks eighth in education overall but 31st in K-12 schooling, eighth in infrastructure, and seventh in natural environment. Its economy ranking sits at a middling 19th, with the business environment subcategory at 11th but employment at 40th. The state finishes dead last—50th—in short-term fiscal stability. The ranking relies on lagging information, including a "low tax burden" metric that uses 2023 state and local tax revenues before the 2025 business and occupation rate increases, surcharges, and the new 9.9% income tax took effect. Business creation figures run only through mid-2025, meaning recent policy shifts and corporate decisions aren't captured.
The Association of Washington Business survey found that 24% of employers are contemplating relocation and 55% of business leaders are considering moving their personal residences. High-profile departures continue, with executives and founders relocating, companies shifting operations to states with lower tax burdens, and office vacancy rates staying elevated. The report points to CNBC's Top States for Business ranking, which places Washington 11th overall but near the bottom—40th—on cost of doing business and business friendliness. The authors write that "a ranking that prioritizes resident quality-of-life indicators while under weighting current business costs, regulatory friction, and net firm migration creates a false sense of security."
The report explains that when high earners and business owners leave, the tax base shrinks, services deteriorate, and remaining residents shoulder heavier burdens. These departures aren't abstract—company owners drive investment, job creation, and an outsized share of tax revenue. Washington's innovation strengths and skilled workforce were built under a more competitive tax and regulatory climate, the analysis notes. Continuing to increase costs while celebrating resident-focused rankings ignores the clear warning from employers, according to the report. The U.S. News composite simply doesn't emphasize the factors that determine whether companies stay, expand, or relocate.
Policymakers should view the data lag and survey evidence as a warning, not cause for celebration, the report concludes. A state that pushes away its economic engines can't maintain high rankings or high living standards for long. Without course correction, the top-10 placement will prove fleeting, and the costs will land on everyone who stays.