Slideshow: 10 Worst States for Business

WORST STATES FOR BUSINESS 10. HAWAII improved two spots but couldn't avoid the bottom 10 "Worst States for Business" list compiled annually by Chief Executive magazine, based on surveys of 650 CEOs. Yes, its living environment rates a top 5 stars, but its workforce quality is only 3 stars and its taxes and regulations are 2 stars. "Hawaii is over-regulated and over-taxed," one CEO told the magazine. Click to see photos of the Best States for Business

WORST STATES FOR BUSINESS 9. OREGON experienced the biggest one-year drop, 9 spots, to fall into the 10 Worst States for Business list in 2012, according to Chief Executive magazine. The Beaver State increased taxes and regulatory fees, the magazine notes. Its living environment rates 4 stars, its workforce quality 3 stars and taxes and regulations 2 stars.

WORST STATES FOR BUSINESS 8. PENNSYLVANIA is another state that fell into the bottom 10 Worst States for Business this year, according to Chief Executive magazine. "Government is bloated with excessive cost and resulting high taxes," a CEO told the magazine. Its taxes and regulations rate 2 stars out of a possible 5, while its workforce quality and living environment rate 4 stars each.

WORST STATES FOR BUSINESS 7. CONNECTICUT "has continued to raise taxes and implement additional regulations the opposite of what is required to stimulate growth," one CEO told Chief Executive magazine. More people moved out of the state than moved in from 2000 to 2009. Its state and local tax burden is considerably higher than the national average, the magazine says.

WORST STATES FOR BUSINESS 6. NEW JERSEY is moving in the right direction (it was 4th in 2011) but it hasn't escaped the 10 Worst States for Business list compiled by Chief Executive magazine. It's taxes and regulations rate 2 stars and its living environment rates 3 stars. Workforce quality is better: 4 stars.

WORST STATES FOR BUSINESS 5. MICHIGAN is in the same spot as 2011 on the Worst States for Business compiled by Chief Executive magazine. "Michigan—ridiculous amount of red tape to start a business," one CEO told the publication. Its workforce quality and living environment are middling (3 out of 5 stars) and taxes and regulations are 2 stars. But the magazine offers some hope for the home of the Big 3 auto makers: "Tax cuts and simplification bode well for future under new Gov. (Rick) Snyder."

WORST STATES FOR BUSINESS 4. MASSACHUSETTS fell two spots on the Worst States for Business from 2011, according to Chief Executive magazine. The new family-leave law hurts companies, the publication notes. While the Bay State's many top-quality universities (Harvard, MIT) help Massachusetts earn 4 stars for workforce quality, its taxes and regulations earn 2 stars and living environment earns 3.

WORST STATES FOR BUSINESS 3. ILLINOIS increased income taxes 66%. You'd think California could improve its position on Chief Executive magazine's Worst States for Business list against that, but no. Illinois' state and local tax burden is still close to the national average. Its taxes rate 2 stars out of a possible 5 and its workforce quality and living environment rate 3 stars each. "Illinois is in a race to the bottom," one CEO told the magazine.

WORST STATES FOR BUSINESS 2. NEW YORK ought to be grateful for California. Otherwise it would top the Worst States for Business list compiled by Chief Executive magazine. The Empire State's workforce rates 4 stars out of five but its living environment and taxes and regulations rate 3 stars each. More than 1.6 million more people moved out of the state from 2000 to 2009 than moved in. Its state and local tax burden is 12.06% compared to 9.8% national average. One CEO told the magazine, "Recently moved from New York state to Tennessee. Differences in ambiance/climate/cost of living/attitude of government towards business are outstanding!"

WORST STATES FOR BUSINESS 1. CALIFORNIA owns the top spot on the Worst States for Business list compiled by Chief Executive magazine. The Golden State has been number 1 for 8 straight years. Its living environment rates 4 stars out of 5, but taxes and regulations earn 1 star and workforce quality is 3 stars. Almost 1.5 million more people moved out than moved in from 2000 to 2009. As one CEO told the magazine, "California continues to head in the wrong direction as its tax policies will drive more businesses and people to relocate in other states." Click to see photos of the Best States for Business