Regulatory Climate Index 2014: Atlanta

Regulatory Index 2014

Atlanta is the business capital of the southeastern United States. The city’s economy is anchored by the headquarters of a number of Fortune 500 companies, which have contributed to the growth of the city and region. A major domestic hub, Atlanta is home to operations and distribution centers of companies and is a major global business center with the world’s busiest airport, Hartsfield Jackson Atlanta International. The region produces an estimated gross metro product of $294.5 billion—60% of Georgia’s economic activity. The local economy is powered by global business leadership in such industries as food and beverage, transportation and logistics, and professional services.

Greater Atlanta has a population of 5.4 million, more than half of Georgia’s total population, and the city itself numbers 443,000 persons. The region is also home to the largest concentration of colleges and universities in the southeastern United States, boasting more than 40 higher educational institutions, including 9 research universities recognized by the National Science Foundation as national leaders in life sciences and engineering research. Atlanta’s city government, the business community, and community organizations are working to ensure the city is growing to be a crucial part of America’s 21st-century economy.

Benchmarking Against Others

Among the cities under review, the 2014 Regulatory Climate Index ranks Atlanta in fifth position, with the first place representing the most efficient regulatory environment. 

The overall score of the Regulatory Climate Index is the simple average of the scores of five areas of regulation. Atlanta ranks fifth overall (score of 72.7), fifth in Starting a Business (86), sixth in Dealing with Construction Permits (65), third in Registering Property (77), fourth in Paying Taxes (58), and fourth in Enforcing Contracts (78).

Atlanta scores above average across all areas of business regulation. Atlanta’s overall score across the 10 cities covered in the report is very close to those of Boston and Raleigh.

 

Where Atlanta is Doing Well

  • The Index shows that Atlanta has a friendly environment for Starting a Business. Atlanta’s entrepreneurs can expect a low number of procedures, minimal amount of time, and token costs for starting a professional services limited liability company.
  • The total costs of construction permits and licenses in Atlanta are less than 1% of total construction costs. The city of Atlanta presents its information to businesses in an accessible and transparent manner.
  • In Atlanta, a real estate transaction is subject to a transfer tax that is much lower than those in the other cities covered in this report.
  • Atlanta’s tax environment is favorable for entrepreneurs. The total tax burden and number of annual payments for small firms is comparable to those of Detroit, Raleigh, and St. Louis.
  • Entrepreneurs and small businesses face a predictable and efficient local legal system in the city of Atlanta for Enforcing Contracts. Atlanta is among the best performing cities in the time and costs of Enforcing Contracts across the cities covered in the report.
 

Where Atlanta Needs Improvement

  • Atlanta’s overall performance across business regulation areas is largely driven by its performance in procedures and time, less so with the cost of regulations and licenses.
  • Atlanta ranks sixth in Dealing with Construction Permits, with an overall score of 65 out of 100. Atlanta’s position in the rankings is driven by the number of procedures for Dealing with Construction Permits when benchmarked against other cities. Under normal conditions, it would take 69 days and approximately 1% of construction costs to obtain construction permits in Atlanta. In comparison, it would take between 39 and 49 days, and less than 0.5% of construction costs, to obtain construction permits in Raleigh and Dallas.
  • Atlanta has a favorable tax environment for entrepreneurs and small businesses; however, new firms are required to pay a business license tax based on the projected revenue and number of employees of a new business. The city may want to reconsider the value of this tax in respect to encouraging the formation of start-ups and new firms.
 
 

City Initiatives

Atlanta is a rapidly growing city and one of America’s leading economies. The business community—together with the Metro Atlanta Chamber—is working with the city and local governments to make Atlanta the destination for entrepreneurs and small businesses in the southeastern United States. The Atlanta Regional Commission has launched an initiative, known as the Atlanta Regional Economic Competitiveness Strategy, that focuses on developing actionable goals for the future of the region. This program aims at fostering cooperative leadership across government, the business community, higher education, and nonprofits to address four key areas of competitiveness: an educated workforce, prosperous businesses, innovative entrepreneurs, and livable communities.

The Atlanta Regional Commission’s competitiveness program names public education as the top public policy priority; it helps coordinate private grant funding for STEM education, and it encourages experiential learning and internships among graduates of higher institutions. The city is working to attract innovative entrepreneurs through programs that nurture new companies, such as Startup Atlanta, the Atlanta Tech Village, and Georgia Tech’s Advanced Technology Development Center. The commission is also focused on developing vibrant neighborhoods and downtown centers that attract small businesses and residents.

The Atlanta Regional Commission and the city of Atlanta have acknowledged the importance of a predictable and transparent regulatory environment for businesses of all sizes. The commission has recommended streamlining local regulations and expediting the permitting process for the issuances of government licenses. As a result, the city has developed a comprehensive information portal for businesses to understand the various requirements and procedures for complying with local regulations. Atlanta’s “Citizen Gateway” is an online portal for citizens, businesses, and visitors to gain access to government services online. The portal allows a business to apply for permits, schedule inspections of licenses, submit planning applications, and reach other government services without visiting city offices. These efforts set a strong precedent for other cities to follow.

 

Conclusion

Overall, Atlanta has a good performance assessment of local regulations and finishes fifth in the overall rankings. The city’s overall performance would be improved through streamlining procedures and expediting the approval time for construction permits. Atlanta’s performance reflects its continuing efforts to develop programs and initiatives to strengthen the business environment, provide access to capital, and encourage economic growth at the local level.

See the attached PDF below for more detailed charts and graphs relating to Atlanta in the Regulatory Climate Index.