CNBC Rankings: A Four-Year Slide
CNBC released its annual business rankings this week, and for Connecticut, the results were all too familiar.
The state slipped for the fourth consecutive year, this time to 46th and a place in the cable network’s worst five states for doing business. Only Alaska, West Virginia, Hawaii, and Rhode Island fared worse.
Why? There’s some familiar problem areas.
We have the fourth-highest cost of doing business, third-highest cost of living, ninth-worst infrastructure, and the nation’s second-worst economy, all key metrics used in CNBC’s America’s Top States for Business 2014.
Connecticut actually fell four places from last year in the cost of doing business. Only California, Hawaii, and New York are more expensive.
Our economy fell from 39th to second-worst, only better than Alaska.
As for cost of living, our ranking was unchanged–48th, ahead of only Hawaii and New York.
CNBC ranked Georgia number one, up from eighth in 2013, with Texas (2), Utah (5), Nebraska (4), and North Carolina (12) rounding out this year’s top five states.
Massachusetts ranked highest of the Northeast states, despite falling nine spots to 25th, followed by New Hampshire (30th), New York (40th), Vermont (42nd), New Jersey (43rd), Pennsylvania (44th), and Maine (45th).
“Unfortunately, these rankings reinforce the perception that Connecticut is not a good place to do business,” says CBIA president and chief executive officer John Rathgeber.
“It’s critical that we address those areas that are hampering economic growth, particularly the high cost of doing business, taxes, government red tape, and our aging transportation infrastructure.
“At the same time, we must continue leveraging and investing in areas where we are strong, such as education and talent, a skilled and productive workforce, technology and innovation, and access to capital.”
Connecticut ranked in the bottom 10 in four of the 10 categories CNBC uses to measure state business climates, with two top 10 rankings for education (fifth, unchanged from last year) and access to capital (seventh, up from 19th).
To be fair, the CNBC study was prepared earlier this year, using data that did not reflect Connecticut’s progress in several areas, including recent job growth, initiatives to reduce energy costs, and regulatory reforms.
And the creation of a commission that will begin reviewing the state’s tax structure later this year presents a real opportunity to improve Connecticut’s economic competitiveness.
CBIA and dozens of other professional and community organizations earlier this year launched the CT20x17 campaign, designed to move Connecticut into the top 20 states in the CNBC and other national rankings by 2017.
States that made dramatic improvements in the latest CNBC rankings did so based on policymakers making conscious decisions to improve their business climates.
Washington, for instance, climbed 14 spots to seventh this year, a performance driven by several factors, including significant reductions in the cost of doing business, improvements in infrastructure and transportation, and a surging economy.
North Carolina jumped from 12th to fifth this year, with tax cuts helping reduce business costs, payoffs from investments in transportation and infrastructure, and a big drop in the cost of living.
Moving the needle
Nonetheless, the road out of the bottom five is a long and challenging one, as Rhode Island is learning. After CNBC ranked the state 50th in 2012, lawmakers and economic development officials mounted a concerted effort to reverse the state’s economic fortunes.
Last year. Rhode Island lawmakers passed 28 “Moving the Needle” bills, overhauling the state’s economic development office, expanding job training, and reforming regulations.
Rhode Island Public Expenditure Council executive director John Simmons says the state takes national business rankings seriously, because “they have merit.”
However, Rhode Island finished worst again this year. Says Simmons: “You can’t change the environment—the ecosystem of the business climate here—instantaneously.”
CBIA’s Rathgeber called this year’s elections–with races for all General Assembly seats, statewide offices, and the Governor’s office–a critical opportunity for raising awareness about improving the state’s business climate.
“And voters must engage candidates at every level and ask them about their plans for promoting economic growth and accelerating job creation.
“This is not just a business issue. Changing the state’s business climate will attract much needed investment, kick start our economy, and create more opportunities and a brighter future for everyone.”
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