This year’s study comes amid slowly improving fortunes for the states. A recovering economy coupled with lingering fiscal restraint following the Great Recession are helping states improve their finances for the first time in years.

“Revenue performance remains positive, expenditures in most states are stable and few states have faced mid-year budget shortfalls in fiscal year 2012,” the National Conference of State Legislators reported in May. That means states can resume their focus on the battle for business — and jobs.

In addition to the top spot overall, Texas has the nation’s best Infrastructure,according to our study. It improved to second place for Technology and Innovation, and boasts the third lowest Cost of Living. The state's Workforceimproved to seventh best from 14th last year. Access to Capitaldeclined a bit, but Texas still finished in the top 10 (eighth). Perhaps most impressive, the Texas economy recovered from a rare stumble last year, when it finished 14th in the category, improving to fifth this year.

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