State’s Business Climate: Policy Choices Matter
Connecticut’s escape from the country’s business climate cellar was short-lived.
A year after vaulting to number 33 in CNBC’s annual America’s Top States for Business rankings, the state fell 10 spots to 43rd in the cable network’s 2016 study.
Two key areas hurt Connecticut’s overall ranking for 2016.
The state’s economy ranked 43rd, after tying for 26th the previous year. Our economy grew just 0.6% in 2015, trailing the New England states and the rest of the country.
CNBC also heavily weights the workforce category, which measures productivity, training, and worker retention.
Connecticut ranked 4th in that category last year, falling to 18th this year.
“Connecticut workers are still among the nation’s most productive based on economic output per job,” the CNBC study explained.
“But the state is losing population—16,000 people left Connecticut last year. That includes skilled workers, and that hurts its workforce score.”
Quality of life, one of the state’s historic strengths, also suffered in this year’s study, with Connecticut falling to 25th from 11th the previous year.
CNBC ranked Connecticut among the top 20 states in three categories:
- Workforce: 18th (2015: 4th)
- Education: 18th (11th)
- Technology and innovation: 19th (19th)
However, the state was ranked among the bottom 10 in four major areas:
- Cost of doing business: 47th (47th)
- Infrastructure: 47th (46th)
- Economy: 43rd (26th)
- Cost of living: 46th (49th)
The cautionary note CNBC struck about Connecticut’s strong 2015 performance—that study was released as lawmakers passed the second-largest tax hike in the state’s history—was prophetic.
“Things are far from perfect in the state, which remains the fourth most expensive state in which to do business,” CNBC said last year.
“A mainstay of the state economy, General Electric has been headquartered in Fairfield for more than 40 years but is threatening to move after lawmakers approved a $1.2 billion tax hike, much of it aimed at businesses.”
We have tremendous assets in Connecticut but bad policy choices over the years limit those strengths.
CBIA president and CEO Joe Brennan said the latest CNBC rankings reflect the huge tax increases the state legislature approved in 2011 and 2015 and continuing fiscal uncertainty.
“We have tremendous assets in Connecticut but bad policy choices over the years limit those strengths," he said.
“If we want our economy to grow, we have to make different policy choices."
Brennan said the latest CNBC study echoed growing frustration among Connecticut voters with policymakers' inability to address the state's fiscal issues, struggling economy, and modest job growth.
A June Quinnipiac University poll found 72% of voters—an all-time high—are dissatisfied with the direction of the state.
And 65% of voters, another all-time high, disapprove of the way the state legislature is handling its job.
With all 187 General Assembly seats up for election this November, Brennan said voters must challenge candidates on their positions.
“Voters can’t just focus on the presidential race because races for the Connecticut legislature will have a major impact on the state's direction over the next two years," he said.
“We must elect candidates who will be serious about getting the state’s fiscal house in order and making Connecticut a top state for economic growth and job creation.”
Utah Ranked First
CNBC ranked Utah first this year, up from 2015's third place finish, based on that state's robust technology sector, a strong economy, low cost of business, and improved workforce and infrastructure.
Michigan was the most improved state, with 2.7% economic growth--including 78,000 new jobs--driving a jump from 22nd to 7th.
CNBC’s top 10 states for business:
- Utah (2015: 3rd)
- Texas (2nd)
- Colorado (8th)
- Minnesota (1st)
- North Carolina (9th)
- Washington (8th)
- Michigan (22nd)
- Georgia (5th)
- Iowa (10th)
- Florida (16th)
And the bottom 10:
- Arkansas (32nd)
- Oklahoma (31st)
- Connecticut (33rd)
- Louisiana (46th)
- Alaska (47th)
- Maine (44th)
47 (tie). Mississippi (43rd)
47 (tie). West Virginia (49th)
- Hawaii (50th)
- Rhode Island (48th)
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