(MONEY Magazine) – *1. Madison, Wis. 2. Punta Gorda, Fla. 3. Rochester, Minn. 4. Fort Lauderdale 5. Ann Arbor 6. Fort Myers/Cape Coral, Fla. 7. Gainesville, Fla. 8. Austin 9. Seattle 10. Lakeland, Fla.

Madison, Wis. is not the best place to live. it's the perfect place to live," insists Donna Shalala. She ought to know. In 1993, Shalala was torn away from her job as chancellor of the University of Wisconsin- Madison to move to Washington, D.C. (ranked No. 128 in our Best Places survey this year), where she serves as President Clinton's Secretary of Health and Human Services. "If I had my choice of living anywhere in the U.S., it would be Madison."

We second the sentiment. This year, Madison (and the rest of Dane County) earns the No. 1 position among the 300 biggest U.S. metropolitan areas in our 1996 Best Places to Live in America ranking. It snagged the top spot because apparently someone forgot to tell the folks in Madison that life is supposed to be full of trade-offs. The 390,300 residents of Dane County, 80 miles west of Milwaukee in south-central Wisconsin, have a vibrant economy with plentiful jobs, superb health care and a range of cultural activities usually associated with cities twice as big. Yet this mid-size metro area also offers up a low crime rate and palpable friendliness you might assume are available only in, say, Andy Griffith's Mayberry. The news that the great Dane County is top dog this year probably won't surprise the region's residents. More than 90% of Madisonians rated their quality of life good or very good in a recent survey. Since the cosmopolitan Madison area--the city accounts for about half the county's population--is surrounded by Wisconsin's everpresent dairy farms, it seems only right to toast 1996's No. 1 big cheese with a wedge of aged Wisconsin cheddar.

Yet mid-size Madison's rise to the top this year--from No. 16 in 1995--is more than a simple dairy tale. Madison won the gold medal much like a decathlon champion who piles up points without winning any single event. As the top 10 table on page 72 shows, Madison beat all its competitors by being proficient in many of our broad categories. If residents of the Wisconsin capital have any major complaint, it might be about the weather. The average winter high is a mere 20ûF, and April snow-showers sometimes usher in late-May flowers. But Madisonians will tell you that's the price to pay for the sublime spring, summer and fall weather. And they do try to make the best of the cold; the city will host the 1997 International Kite Skiing World Championships next Jan. 30 to Feb. 1.

If you're looking for more temperate climes with a great quality of life, Florida is this year's best state. For the second consecutive year, the Sunshine State boasts five of the top 10 places, though not the same five as last year. Punta Gorda (No. 2), 50 miles south of Sarasota on the Gulf Coast, leads the Florida flotilla, while Gainesville (No. 7) slipped from last year's No. 1 ranking. Fort Lauderdale (No. 4), Fort Myers/Cape Coral (No. 6) and Lakeland (No. 10) complete the Florida Five in our top 10. Strikingly, the state is home to 10 of the top 20 best places this year. "The Florida economy is extremely healthy," says Mark Vitner, an economist at First Union National Bank in Charlotte, N.C. who specializes in the southeastern states.

Florida's 20 metro areas also have the pocketbook-friendly advantage of no state or local income tax. That was an important factor in the high rankings for Austin (No. 8) and Seattle (No. 9) too. And taxes aside, strong economies, terrific health care and low crime helped Rochester, Minn. (No. 3) and Ann Arbor (No. 5) round out our top 10.

All 10 of our best Best Places share some key characteristics:

--Plenty of jobs. While many Americans worry about keeping their jobs--or getting new ones if they're downsized--there are ample employment opportunities in our top 10. NPA Data Services, a Washington, D.C. research and economic forecasting firm, projects that each of these metro areas will post job gains through 1999 that easily beat the forecast 6% U.S. average.

--Great outdoors. Yes, it gets darn cold in Ann Arbor, Madison and Rochester, but locals in all top 10 spots gloat about their natural surroundings. Weather permitting, each area offers great biking, boating, fishing, swimming and jogging opportunities.

--Manageable size. Eight of our top 10 places are either small (population below 250,000) or medium-size (up to 999,999). Fort Lauderdale (1.4 million) and Seattle (2.2 million) are the lone biggies. The box on page 92 offers more proof that the good life is harder to come by in the nation's large cities.

So what makes us so mad about Madison? Start with the peppy economy. Madison's absurdly low 1.5% unemployment rate is the lowest of all 300 places we ranked. Partly, that's because the 40,000-student University of Wisconsin accounts for nearly 13% of the area's steady work force. Madison is also home base for about 20,000 recession-resistant federal, state and county government jobs. More than 10,000 small and mid-size manufacturing and service firms help fuel local growth.

You might not think of Madison as a high-tech center, but more than 300 tech firms--mostly small biomedical, pharmaceutical and micro-electronic companies--have notched average annual job growth of more than 10% during the past decade. Bill Linton, founder and president of Promega, a $60 million supplier of chemical products for researchers, says Madison's superb quality of life has been an important recruiting tool. "We don't have oceans or mountains, but even people from California like coming here," says Linton, who oversees a staff of 425. "That's because we also don't have long commutes, traffic congestion, a crime problem or overcrowded schools."

The schools get understandably high marks from parents. There are 14 students per teacher in the county's public schools, on average, which is the 23rd lowest among our 300 places, according to Expansion Management, a trade magazine in Overland Park, Kans. that measures the nation's schools for MONEY. In addition, the 1,141 average SAT score for Madison high schoolers is 25% higher than the U.S. average. No wonder, then, that 91% of parents send their children to public schools.

Mad City, as locals call it, is also Fun City, especially if you like boats and bikes. The Mendota and Monona lakes are separated by a half-mile-wide isthmus that serves as downtown Madison. Add in three other large lakes, and Dane County can satisfy any type of boating preference. Cyclers have more than 150 miles of bike trails and routes to pedal. In winter, cross-country skiers glide through more than 100 miles of trails. For cerebral outings, Madison has five museums, including the little-hands-on Madison Children's Museum.

Saturdays in the fall are reserved for rooting on UW's revered Badgers football team. The Milwaukee Brewers and Bucks provide major league baseball and hoops action, and football's Packers are a two-hour drive north in Green Bay. A popular May through October ritual is the farmers' market, where about 18,000 residents shop each Saturday. The convivial throng could teach New Yorkers a thing or two about crowd control, as everyone moves in a fluid and orderly counterclockwise processional. Serious shoppers pull wagons to haul home portobello mushrooms, smoked trout, plants, bratwurst, baked goods and, of course, cheese.

There's also plenty to do without getting out of a chair. The Canterbury Booksellers Coffeehouse Inn attracts a multigenerational crowd, where evening entertainment ranges from a jazz combo and book readings to elementary school kids reading their original works. Around the corner, you can catch an earful at the Madison Civic Center, where the Wisconsin Chamber Orchestra and Madison Symphony perform, and plays such as Edward Albee's Pulitzer prize-winning Three Tall Women are staged.

Madison became No. 1 through our proprietary three-step ranking process. First, we had the New York City polling firm of Roper/Starch Worldwide survey our readers, asking a representative sample of 250 subscribers (median household income of $72,625) to rate 41 quality-of-life factors on a scale of 10 (most important) down to one (least important). Low crime was the top priority this year, although job concerns scored highly too. For a detailed look at what matters most to MONEY readers, see page 79.

Next, working with Fast Forward, the Portland, Ore. demographic consulting firm, we collected data for the 300 largest metro areas as defined by the U.S. Office of Management and Budget. Flagstaff, Ariz. (No. 208) and Hattiesburg, Miss. (No. 260) joined this year's list. We used a combination of government data and information from private sources. For example, our crime figures are from the latest FBI Uniform Crime Statistics report, which covers 1994. Century 21's real estate brokers gave us the typical price of a three-bedroom home and its property taxes in each area, plus the appreciation rate over the past 12 months. Other data providers included the American Chamber of Commerce Researchers Association for cost-of-living stats; Arizona State University's Economic Outlook Center for recent job growth; and NPA Data Services for future job growth.

We added three new types of data this year. To measure air quality, we used the ozone ratings of the Environmental Protection Agency. To flesh out our arts scores, we included figures from Opera America, a not-for-profit group. And in our leisure category, we awarded points to metro areas within 60 miles of the nation's most visited amusement parks, according to Amusement Business magazine.

Once we had the figures, Fast Forward's Bert Sperling assigned them to our nine broad categories: crime, economy, health, housing, education, weather, leisure, arts and culture, and transportation. Then we weighted the data according to our readers' preferences. Finally, reporters visited the top 10 and bottom five places. After all, computers can't tell you everything.

As in the past, some places moved substantially in our rankings. Such seismic shifts are a combination of our readers' changing preferences from last year, updated figures and new data. The news certainly improved in Norfolk/Virginia Beach/Newport News, which jumped to No. 117 from 283 last year, powered by improved rankings in health, education and housing. No. 38 Monmouth/Ocean counties, N.J. also shimmied up, from 167 in 1995, on the strength of forecast job growth. California--and its economy--is on the comeback trail from 1995, when its highest ranking was 24th-place San Francisco. This year, San Francisco, San Diego and San Jose landed in the top 20, at No. 13, 16 and 19 respectively. Benton Harbor, Mich. (No. 249) plunged the farthest; a projected job growth rate that's a third the U.S. average contributed to its 202-slot dive.

The bottom five places didn't score highly in any of our categories. Lima, Ohio (No. 296) is contending with massive downsizings. For example, the General Dynamics plant currently employs 600 workers, compared with more than 2,000 in 1992. Talk to anyone in Davenport, Iowa (No. 297), and you'll hear that life is a lot better than in the early '80s, when the nation's farm economy hit the skids. Still, the area--which includes Bettendorf, Iowa, and Moline and Rock Island, Ill.--was in the bottom third of our economy, crime and education rankings and scored poorly for leisure. To be fair, the Quad City Thunder play in the Continental Basketball League and there's riverboat gambling on the Mississippi and class-A baseball. Peoria (No. 298) copes with big public school classes and small future job growth that's expected to be half the U.S. rate. Though last year's No. 300, the farming community of Yuba City, Calif. moved up to 299, it still struggles with a near 20% unemployment rate in the winter nonfarming months.

At the bottom, No. 300 Rockford, Ill. grapples with subpar prospects for future job growth and a below-average health-care system. The region's low number of doctors per capita rates in the bottom third of our 300 areas. Rockford also has little in the way of measurable arts, culture or leisure activities. But Sunil Puri, 35, raves about the area's friendliness. "This is a community where people really care about one another," says the land developer. On page 86, Michael Moore reports on the continuing travails of his hometown, No. 140 Flint, Mich., which was our first No. 300 and the subject of his film, Roger and Me.

For detailed descriptions of our Best Places Nos. 2 through 10, read on. You can also find out how living costs vary, on page 81. And if crime is on your mind, check out the box on page 92 for a look at the metro areas with the lowest crime rates in America: Appleton/Oshkosh, Wis. and Johnstown, Pa. --C.F.

NO. 2 PUNTA GORDA, FLA.

-- Area population: 126,500 -- Unemployment rate: 4.6% -- Three-bedroom house: $165,000 -- Property tax: $1,700 -- Top state and local income tax: None -- Sales tax: 7% -- Violent crimes per 100,000 people: 297 -- Annual sunny days: 264 -- For more information: 941-639-2222

You've probably never heard of Punta Gorda. Don't fret. The picturesque Gulf Coast area of southwest Florida has been a well-kept secret waiting to be exposed. Truth is, plenty of Americans have been voting with their feet to establish this metro area, which includes all of Charlotte County, as one of the best places to live in the country. The county had the largest population growth of any in the U.S. during the 1980s (90%); since 1990, the populace has ballooned by another 16.7%. Even so, Punta Gorda is still tiny enough to be MONEY's Best Small Place to Live in America (page 77) as well as our Best Place in the South (page 85).

It's easy to see why. Violent crime is 59% below the national average; it's sunny two out of every three days; no one's in a hurry; and best yet, Punta Gorda's economy topped all 299 other metro areas in the ranking.

The future looks equally bright. Indeed, the economic forecasting firm NPA Data Services projects that Punta Gorda's 16.3% job growth between now and 1999 will lead the U.S., clocking in at nearly triple the national average. "The Southwest is the current frontier in Florida," says Stan Geberer of Fishkind & Associates, an economic consulting firm in Orlando. Budding entrepreneurs, take note: Retiree-rich Charlotte County has the highest percentage of people over 65 in the country (36.1%)--three times the national average--so products or services geared to older Americans have tremendous potential here.

But don't expect to find only retirees in Punta Gorda. Lately, younger people visiting their parents and grandparents are deciding to stay. They're drawn by a cost of living that's 5% below the national average, plus typical three-bedroom houses costing $165,000, according to Century 21. In idyllic Punta Gorda Isles, most homes have at least 2,000 square feet, with a pool and canal out back.

The town of Punta Gorda itself is Florida's version of quaint. The revitalized downtown still has cobblestone streets and gas lamp streetlights, patterned after the Spanish style of the 19th century. You needn't worry about crowds, either. Once you get away from U.S. Highway 41, the pipeline through most of the county, Punta Gorda is pretty quiet. Churches outnumber nightclubs (11 to 1), and you're far more likely to see sandals and shorts than designer garb. Little League, bingo and gardening are top priorities for residents, when they're not sailing in Charlotte Harbor or enjoying the white-sand beach in nearby Englewood.

Punta Gorda is the kind of place many newcomers quickly learn to love. For instance, Jerry and Patricia Hayes, 45 and 41, aren't the slightest bit sentimental about leaving New York City two years ago. "I wear shorts to work and have time to ride a bike, which I haven't done since I was a kid," says Jerry, a former Wall Street broker who now sells real estate. Adds Patricia, a nurse: "My friends from New York are overwhelmed by the beauty of the water and the people here. Some of them have started to house hunt." --S.N.N. NO. 3 ROCHESTER, MINN.

-- Area population: 112,900 -- Unemployment rate: 2.5% -- Three-bedroom house: $95,100 -- Property tax: $1,300 -- Top state and local income tax: 8.5% -- Sales tax: 7% -- Violent crimes per 100,000 people: 176 -- Annual sunny days: 200 -- For more information: 507-288-1122

As impressive as placing third in this year's rankings may be, it still has to be something of a letdown for the residents of Olmsted County, 80 miles southeast of Minneapolis. After all, this is the lowest Rochester has landed since 1993, when its population became large enough to allow the city to join our list of the 300 biggest U.S. metro areas. That year, it snagged the No. 1 position, followed by second-place showings in '94 and '95.

Such notable excellence is the result of the residents' remarkable resilience--and we have more in mind than the fact that folks call a 16 degrees F winter day a warming trend. In 1994, cutbacks at the renowned Mayo Clinic and an IBM facility cost Rochester nearly 4,000 jobs, or 5% of its labor force. Yet by this past March, area employment had again surpassed the '93 peak, and the jobless rate had fallen to an enviable 2.5%. Part of the employment boost came from companies that decided to move into the Rochester region. For example, in late 1994, Western Digital opened a disk-drive division that now employs 180 workers.

Many other jobs have been created by locals who wanted to stay in Rochester despite being downsized. For example, rather than take IBM's offer to relocate to another part of the country, in 1993 Al Berning and seven others launched Pemstar, an engineering and manufacturing firm that now employs 220. "I could have moved someplace else, but this area just offers us so much," says Berning. "I knew there was a strong skilled work force here, and I sure like my five-minute commute."

The public schools get an A+ as well. According to Expan-sion Management, an Overland Park, Kans. trade magazine, Rochester's school district has the fifth best high school graduation rate among our 300 metro areas. And excellent schools are the pride of the city. "I have never experienced such a tremendous level of commitment from a community in my 30 years in school systems," says superintendent Jack Noennig, who came to Rochester 16 months ago from St. Francis, a middle-class Minneapolis suburb. Indeed, about half of the city's registered voters recently approved by a 2-to-1 ratio a $37.8 million bond issue to build a 1,600-student high school and upgrade equipment in existing schools.

Rochester also scores well for its low violent-crime rate--a quarter of the U.S. rate of 716 incidents per 100,000 inhabitants. Housing, on the other hand, is truly a steal. A typical three-bedroom house costs 20% less than the national median. Property taxes are relatively low too, though the area's income and sales tax levels run relatively high.

When it's time to get out of the house, Rochesterites can drive 90 minutes to Minneapolis and catch the baseball, football and basketball pros--the Twins, Vikings and Timberwolves. Another popular jaunt is hitching the powerboat to the minivan and driving 30 miles southeast to enjoy a day on the Mississippi. In the winter, the four feet of snow that typically descends on the area is ideal for cross-country skiing and snowmobiling. Or the Mall of America, the nation's biggest shopping center, is only a 1 1/2-hour drive north in Bloomington. --C.F.

NO. 4 FORT LAUDERDALE

-- Area population: 1,383,000 -- Unemployment rate: 5.5% -- Three-bedroom house: $105,000 -- Property tax: $1,500 -- Top state and local income tax: None -- Sales tax: 6% -- Violent crimes per 100,000 people: 965 -- Annual sunny days: 248 -- For more information: 305-462-6000

Sports nuts who move to our Best Big Place in America might think they've died and gone to heaven. "Fort Lauderdale is great for outdoor sports like tennis, golf and softball. People here are always outside," says lifelong resident Gordon Diem, 39, a freelance photographer and fishing guide.

Water activities are plentiful too, in Fort Lauderdale and the entire Broward County metro area. Dubbed the world's yachting capital for good reason, you can dock your boat in Fort Lauderdale and on a whim sail down to the Bahamas for a day or hit the Keys in a couple of hours. A onetime spring-break magnet and the location for the 1960 Connie Francis movie Where the Boys Are, Fort Lauderdale has stunning Atlantic beaches, perfect for snorkeling. (City officials have successfully discouraged college students from partying hearty; now only 10,000 kids come for break, vs. 350,000 in 1986. Hotels no longer advertise to college students and instead target families.)

While the only pro sports team here is the Orioles in spring training, you don't need to go far to catch a game during the season. It's a 45-minute drive down to Miami, home of basketball's Heat, football's Dolphins, baseball's Marlins and hockey's Panthers.

When you actually do have to go to work, it's a field of dreams as well. Recent job growth in Broward County outpaced the national average by three percentage points, and that rapid clip is expected to continue over the next three years, according to NPA Data Services. "Most of the growth is from the smaller guys," says Louis Sandora, vice president of international marketing for the Broward Economic Development Council. For instance, Alliance Entertainment, a distributor of CD-ROMs and computer games, just moved here from New York City and is expected to create 600 jobs. Even so, more than 80 Fortune 500 companies have operations locally, and Fort Lauderdale is HQ to Blockbuster Entertainment, Alamo Rent a Car and Microsoft's Latin American operations.

Health care and public schools offer two appealing lures to emigres. The area's 20 hospitals include a satellite of the famed Cleveland Clinic. And "Schools are viewed as being better in Broward than in Miami's Dade County," says Craig Werley, director of real estate advisory services at Price Waterhouse in Miami. "So if parents are looking at living in Miami or Fort Lauderdale, they'll be drawn to Broward."

Nightlife is more active and varied than you might expect. Broward County has more eating and drinking places per capita than any other area in the U.S. Whether you like to shop or museum hop (one favorite: the Museum of Discovery and Science), there is no shortage of choices. Coming this fall: Beach Place, a $50 million entertainment and retail complex with more than 20 stores, 10 restaurants and a handful of nightclubs--the latest example of the rejuvenated beachfront scene.

Fort Lauderdale's chief woe, as with many other big metro areas, is crime. The violent crime rate here is 35% above the national average. But, says Ott Cefkin, of the county's sheriff department, "Community policing is having an impact. Violent crime is down 2% since 1994." --S.N.N.

NO. 5 ANN ARBOR

-- Area population: 515,300 -- Unemployment rate: 3.2% -- Three-bedroom house: $170,000 -- Property tax: $3,000 -- Top state and local income tax: 4.4% -- Sales tax: 6% -- Violent crimes per 100,000 people: 250 -- Annual sunny days: 185 -- For more information: 313-665-4433

Ann Arbor, affectionately known as A2 by its residents, has a lot in common with Big 10 rival Madison. A 45-minute drive west from Detroit, Ann Arbor boasts a robust economy fueled by its hometown college, the 36,000-student University of Michigan. UM is the largest local employer, with 23,300 on its payroll, or 9% of the work force. The balance of jobs, however, are in the health-care, automotive and biomedical research fields. In fact, Ann Arbor's 300 software companies furnish about half of the computer gizmos used to operate today's cars and vans.

While some might choose Silicon Valley or Seattle for high-tech work, David Gregory, 42, prefers big A. Three years ago, Gregory quit his job as a UM music professor to launch Media Station, a designer of interactive children's software that has since produced Disney's Pocahontas and The Lion King on CD-ROM. Why did he stay in Ann Arbor, with his wife Deborah Kuick, 44, and their four children, rather than head west? "It's much less expensive to set up a business here, and there's a wealth of talent to tap from UM," he says. "Plus, in Silicon Valley there's too much inbreeding. Everyone knows what you're doing, which tends to stifle creativity."

Readers polled in our survey this year say crime is public enemy No. 1. Apparently Ann Arbor has what is America's most wanted attribute: safety. It scored the best in the crime category of our top 10 and has the fifth highest overall crime score of all 300 metro areas. The violent-crime rate is nearly one-third below the U.S. average, and the property-crime rate is about half. Sergeant Phil Scheel of the Ann Arbor police says the area is safe because "we have 170 full-time officers deployed in five locations, so people can walk into the various offices and seek help if they need it."

Ann Arbor also cleaned up in our health category, with top scores from the Environmental Protection Agency in both air and water quality. The UM Medical Center, renowned worldwide for its physicians' work in the specialties of ear, nose and throat and of geriatrics, has a physician staff of more than 800; an additional 1,400 or so M.D.s practice within the Ann Arbor metropolitan area. That means there's one doctor for every 50 people in the city, vs. the U.S. average of one for 483.

Proximity to Detroit is a major plus for Ann Arborites who like to watch pro sports and dine out. Detroit is home to seven pro teams, including football's Lions, basketball's Pistons, hockey's Red Wings, and baseball's albeit hapless Tigers. The Motor City and its environs also lay claim to three of Mobil Guide's four-star restaurants: Van Dyke Place and The Whitney, both in Detroit, and The Lark in West Bloomfield, Mich.

But residents can stay closer to home to take in the arts. Every July, more than 500,000 people see the work of the 1,000 artists in town at the Ann Arbor Art Fairs, the annual--and nation's biggest--street arts fair. Treasure hunters can hit nearby communities like Saline and Manchester for antiquing pleasures.

Summing up the quality of life in this town is as simple as a scientific equation: A2 = A small town + Amenities - Big-city problems. --L. M.

NO. 6 FORT MYERS/CAPE CORAL, FLA.

-- Area population: 367,450 -- Unemployment rate: 4.6% -- Three-bedroom house: $103,000 -- Property tax: $1,000 -- Top state and local income tax: None -- Sales tax: 6% --Violent crimes per 100,000 people: 704 -- Annual sunny days: 264 -- For more information on Fort Myers: 941-332-3624; for Cape Coral: 800-226-9609

Back in the early 1900s, Fort Myers was a retiree playground where the likes of Thomas Edison and Henry Ford spent winters tanning themselves on the gorgeous beaches of the Gulf of Mexico, 30 miles south of Punta Gorda. These days, only 25% of the local population is 65 and over. Says Pennsylvania transplant Melette Moffat, 30-plus and single, who works at the Book Den South in downtown Fort Myers: "This is such a family place that the dating scene sucks for singles. But I have a job I like and with this weather you can really enjoy the outdoors. Every day, when I cross the bridge from Cape Coral I think how lucky I am to live here."

Fort Myers (pop. 45,500) and Cape Coral (pop. 84,500), the two major cities in Lee County, are opposites of sorts. Fort Myers is more citified in look, atmosphere, attitude and racial diversity. Cape Coral welcomes water worshippers. The Cape, as locals call it, has some 20 times more canals than Venice, Italy--a plus for the town's many boatniks. It's suburban, community-oriented and a tad less expensive than Fort Myers.

Local housing is affordable, eclectic and--best of all--appreciating smartly. You'll see historic, modern, and humble homes all in the same block, usually nestled among the palms. According to Century 21, a typical $103,000 three-bedroom house in Fort Myers rose in value by 14.4% over the past 12 months.

Also, as with our other four Florida top 10 places, the economy has been a powerful magnet recently. Last year's job growth of 4.54%, according to Arizona State University, bests the U.S. average by three percentage points. And the 4.6% unemployment rate is below the national average, as it has been for much of the past two years.

The county has been actively courting businesses, with notable success. For example, in March, Sony opened a customer information service center that ultimately will employ 450 people. In 1997, Lee County will be home to a new state college--Gulf Coast University. "You can't underestimate what this means. The university will customize courses to fit local business needs and then supply firms with employees who have appropriate training," says Janet Watermeier, executive director of the Lee County Office of Economic Development.

Folks in Lee County already are big on education. The area's 91% high school graduation rate places it among the nation's best. What's the secret? Some credit the Foundation for Lee County Public Schools, a nine-year-old, nonprofit group whose high-profile Golden Apple Teacher Recognition program rewards outstanding teachers with a $2,500 stipend and prepaid continuing education.

Lee County is home to two of the state's most popular islands: Sanibel and Captiva, known worldwide for their spectacular seashells. The 6,000 permanent residents of Sanibel also enjoy the J.N. "Ding" Darling National Wildlife Refuge and more than 20 art galleries, amid all the tourists. And commuting? Let's put it this way: On Sanibel and Captiva, there are no traffic lights. --S.N.N.

NO. 7 GAINESVILLE, FLA.

-- Area population: 193,100 -- Unemployment rate: 3.8% -- Three-bedroom house: $93,900 -- Property tax: $1,875 -- Top state and local income tax: None -- Sales tax: 6% -- Violent crimes per 100,000 people: 1,377 -- Annual sunny days: 242 -- For more information: 352-334-7100

Gainesville, last year's Best Place to Live in America, had its 15 minutes of fame. Now the challenge for this north-central Florida community is staying in the spotlight. With recent job growth of 2.27%, vs. 6.2% last year, the economy has slowed some, largely explaining its slip to No. 7.

But don't even think about pronouncing the economic engine dead in Gainesville (pop. 94,000) or the rest of Alachua county, which makes up the metro area. According to NPA Data Services, over the next three years, job growth here will average 10.5%, almost double the U.S. rate. Moreover, recent innovation from Gainesville's lifeblood, the 39,000-student University of Florida, almost assures a stellar future. This past fall, the Sid Martin Biotechnology Development Institute, a building owned by UF, opened in nearby Alachua, making Gainesville an up-and-coming spot for entrepreneurs. This incubator gives as many as 20 business owners access to scientific equipment, labs and office space at a good price for up to three years. Ten companies, such as Florida Genetics and Ixion Biotechnology, already call the research complex home. Meanwhile, other local companies have expanded, including the largest private employer, Energizer Power Systems, which broke ground on a 77,000 square-foot lithium-ion rechargeable-battery facility earlier this year. By 1998, Energizer will add 150 jobs, mostly for engineers, technicians, machinists and support personnel.

Gainesvilleans have at their doorsteps affordable housing, whose median value of $95,900 appreciated a healthy 16.5% in the 12 months that ended in March, according to the National Association of Realtors. They can also avail themselves of topnotch medical care. The 576-bed Shands Hospital at UF is noted for its neurological, cardiovascular, cancer and transplant centers.

Outdoor recreation abounds in and around this college town. Any day of the week you're likely to see parades of people riding bikes or jogging past the lush greenery, palm trees and mighty oaks that define this place. Since the area is midway between the Atlantic and the Gulf of Mexico, residents can point their car in either direction if they want to drive an hour or so for a beach weekend. But one of the hottest tickets in town is for those fighting Gators at UF, who were undefeated last year until their loss in the Fiesta Bowl.

Folks here are willing to put in the time it takes to get their jobs done, but they also know how to have fun. After quitting time, many hang out downtown, where you'll find a bit of everything--Mexican food, jazz joints and Cajun cooking at the popular Harry's Seafood Bar & Grill. Cindy Montalto, 41, co-owner of the six-room Magnolia Plantation bed and breakfast says: "I like to go antiquing in nearby High Springs or Micanopy. And when relatives visit, I take them to one of the nearby springs."

It seems like residents here also have hearts as big as the state. The area raised the second largest contribution per capita in the U.S. for the March of Dimes' Walk America in 1995 ($393,986). Those hearts swelled with pride this past year too. Being named No. 1 by MONEY last September proved a powerful morale boost. More important, it got residents to focus on how to make the area an even better place. Says Rick Mulligan, president of the Gainesville Area Chamber of Commerce: "We formed a task force to help solve economic problems on the east side of town. We are a more unified community now. If you're No. 1, you have to act like you're No. 1. It permeated our thinking." --S.N.N.

NO. 8 AUSTIN

-- Area population: 964,000 -- Unemployment rate: 3.5% -- Three-bedroom house: $98,000 -- Property tax: $2,800 -- Top state and local tax: None -- Sales tax: 8.25% -- Violent crimes per 100,000 people: 539 -- Annual sunny days: 231 -- For more information: 512-478-9383

If the low-stress life that's mirrored in Madison sounds enticing but you can't take long, cold winters, then set your sights 1,000 miles and seven ranking slots south to Austin in central Texas. Like Madison, this funky state capital has an economy that's humming. In fact, its 6.8% job growth last year was the second strongest in the country, after Killeen/Temple, Texas, according to researchers at Arizona State University. Little wonder, then, that the Austin metro area rose from No. 35 in our 1995 rankings.

Yet unlike Madison, the average high temperature from December through February is 60 degrees F. (If there's any season to complain about, it's summer, when highs hover near 100 degrees F.) Austin's weather isn't the only thing that's less taxing, though. Along with Seattle and the five Florida spots in our top 10, Austin has no state or local income tax--and none is on the horizon.

An enclave of liberalism in otherwise conservative Texas, the metro region gets much of its character from being home to the 48,000-student University of Texas at Austin. Indeed, more than 12% of the work force is employed by the university or by the state government. Austin is also deep in the heart of Tech-xas. More than 540 high-tech manufacturing firms, including Advanced Micro Devices and Dell Computer, are based here. And Samsung Electronics recently announced plans to hire more than 1,000 people for its $1.3 billion semiconductor plant that will open by late 1998. Darrell Glasco, vice president at the regional chamber of commerce, expects a 20% increase in software jobs by the end of '97.

Kim and Glenn McGorty, who recently moved here as part of IBM's relocation of 800 employees from Boca Raton, Fla., are two typically jubilant tech pilgrims. "We've been impressed by the warmth of everyone," says Kim, 34. Awaiting the completion of their Cedar Park home, the McGortys were invited to a block party in their neighborhood-to-be. "We haven't even moved in, and we know everyone already," marvels Kim.

They also found a healthy housing market. "It's never been better for buyers and sellers," says Century 21 broker Dean Ripley. He reports that Austin sellers generally get 98% of their asking price within 40 days of listing their homes. But buyers can't complain either, as the average price still goes for nearly 15% less than the U.S. median, even after last year's 12% appreciation.

Young techies aren't the only newcomers to the region. The Del Webb Group, known for its famed Sun City retirement communities in Arizona, is building a 9,500-unit development 30 miles north of Austin in Texas' famed Hill Country.

You can't describe Austin fully without mentioning its yummy food and hot music scene. For down-home cooking there's barbecue at the Iron Works ($10.95 for a humongous plate of ribs, beans, potato salad, pickle and bread). Meanwhile, Chez Nous serves up a $16.50 three-course French meal. When it comes to live music, Austin has a strong case of the blues--and jazz and rock. Dozens of small clubs and bars offer up live tunes. So it's hard to argue with Austin's self-proclaimed billing as the Live Music Capital of the World. --C.F.

NO. 9 SEATTLE

-- Area population: 2,179,600 -- Unemployment rate: 4.7% -- Three-bedroom house: $173,400 -- Property tax: $2,250 -- Top state and local income tax: None -- Sales tax: 8.7% -- Violent crimes per 100,000 people: 542 -- Annual sunny days: 136 -- For more information: 206-389-7200

We know, we know: You've heard all about how wonderful Seattle is, to the point of nausea. After all, we ranked the Seattle metro area (which includes Bellevue and Everett) No. 1 back in 1989, but bear with us. Because even if you strip away all the hype, the Emerald City still belongs on this year's list of top places and deserves its position as our Best Place in the West.

Some people have moved here to escape their state's income taxes; Washington has no income tax. Others are flocking because the city offers them superb health care and great jobs. Take pediatrician and health consultant Beth Rivin, a recent single transplant from the Washington, D.C. area who has also lived in Boston and New York City. "I moved here for a change in lifestyle," says Rivin, 42. "All I used to do was work, and the other professionals where I lived put their careers before all else too. Here, there's a sense of community that I didn't find back East."

Not to mention a sense of space. Residents can drive an hour east to the Cascade Mountains for breathtaking views, clean air, hiking and skiing. Or trek two hours west to the Olympic Mountains for snowshoeing. On summer weekends, the area's 130,100 boat owners like to set sail for the nearby San Juan Islands where they can go whale watching, kayaking or even, yes, scuba diving.

You know about the grunge music scene and the caffe latte, of course. But you may not know that Seattle is second only to the Big Apple in annual theater performances. The area also boasts three Mobil Guide four-star restaurants: Fullers, Shoalwater in Seaview's Shelburne Inn and The Herbfarm in Fall City. Or if you prefer, you can knock back a few beers at Big Time Brewery & Alehouse or Forecaster's at Red Hook Brewery.

Residents cheer on three professional sports teams, most notably baseball's Mariners--though that number may soon drop to two. NFL Seahawks owner Ken Behring has threatened to leave the downtown Kingdome and move the team to Los Angeles. That would amount to a double tragedy, since it would just get even harder to snag tickets to the University of Washington's Huskies football games.

Seattle's economy is just now coming out of a slight funk. Doug Pedersen, an economist with the Puget Sound Economic Forecaster, a quarterly newsletter, blames its paltry 1.24% job growth in 1995 in part on the slack aerospace industry. Today, however, the local unemployment rate is an enviable 4.7%, half a percentage point below the U.S. average. And Boeing, the area's biggest private employer, announced it will expand its work force for the first time in five years, to 78,500, by adding roughly 6,700 Seattle-area staffers.

"Our recession resistance comes from Microsoft and hundreds of other software companies nearby," says Pedersen. Over the past six years, the $5.9 billion uber software maker in nearby Redmond added 7,500 jobs for a current total of 10,500. Microsoft plans to hire another 2,000 by year's end, all in the Seattle area. All in all, future job growth is expected to zoom 10% through 1999, vs. 6% nationally, according to NPA Data Services.

There is some trouble in paradise, however. When you add the new jobs to the 11% population increase over the past seven years, you get traffic jams. Seattle's roads are the eighth most congested in the country, according to the Texas Transportation Institute. And a three-mile commute from Seattle to suburban Bellevue could set you back 30 minutes. That's the price you pay for prosperity. --L.M.

NO. 10 LAKELAND, FLA.

-- Area population: 429,600 -- Unemployment rate: 6.1% -- Three-bedroom house: $75,000 -- Property tax: $700 -- Top state and local income tax: None -- Sales tax: 6% -- Violent crimes per 100,000 people: 864 -- Annual sunny days: 259 -- For more information on Lakeland: 941-688-8551; Winter Haven: 941-293-2138

"Only 10 years ago we were flat on our backs with a double-digit unemployment rate," says Steve Scruggs, executive director of the Lakeland Economic Development Council. Today, Lakeland--a half-hour drive up Interstate 4 from Tampa--is standing tall. Lakeland (whose metro area includes all of Polk County) moved up 31 notches this year because it excels in the qualities readers deemed more important in '96: a healthy employment market today and strong prospects for future job growth.

You're also now likely to find a better-paying job in Lakeland (pop. 74,000) than a few years back. Located inland roughly midway between the population centers of Tampa and Orlando, Lakeland has turned into a perfect place for businesses like Discount Auto Parts to set up a distribution hub, according to Mark Vitner, an economist and vice president at First Union National Bank in Charlotte, N.C. In addition, the area now offers many retailing and service jobs, plus light manufacturing. So the economic base has expanded well beyond its traditional mix of tourism, citrus growth and processing, and phosphate mining.

To attract businesses and new residents, Lakeland dressed up its downtown over the past eight years. The $65 million investment created a thriving antiques district, shops, restaurants, office development and the restoration of historic Munn Park. Nevertheless, the area hasn't lost its southern feel. In fact, based on what we saw when we visited, Lakeland has more of the Old South in its character than any of our other five top Florida spots.

While the economy has taken off, housing prices are still laughably low. A typical three-bedroom home goes for about $75,000, according to Century 21. That makes Lakeland the least expensive of the five Florida cities in our top 10 by more than 25%. Annual property taxes typically cost less than an unrestricted round-trip flight from Tampa to Los Angeles.

With a name like Lakeland, you'd expect water to be plentiful. Sure enough, there are 16 pristine lakes within city limits suitable for swimming, sailing or bass fishing. If you're going to nearby Winter Haven, don't forget your skis. This community--about a third retired--is also water-ski country and home to the American Water Ski Association's Hall of Fame.

Interested in activities that are a bit less taxing? In Winter Haven, you might explore one of the state's most popular tourist destinations, Cypress Gardens, with more than 200 sprawling acres of tropical paradise. Families can also hit Disney World and Universal Studios in less than an hour. Baseball fans get their fix easily here, since the Detroit Tigers, Kansas City Royals and Cleveland Indians all host spring training in Polk County. In fact, the county is loaded with retirees from Detroit who moved here so they could see their team play in the sun.

Carole Philipson, 48, a vice president at Lakeland Regional Medical Center, says she and husband Lyle, 49, are delighted with their life here. "For a town of this size it has a surprising amount of culture, which we were used to in New Orleans," she says. "And people are friendly. If you ask for help in a store, they don't shout at you. They take the time to show you what you want." --S.N.N.

Reporter associates: Stephen Bloom, Genevieve M. Fernandez, Kate Griffin, Melanie Mavrides, Claudia Morain and Elizabeth S. Roberts