Connecticut dropped one place to #46 in CNBC’s latest “America’s Top States for Business” study, with the state’s persistently slow economy and high costs of doing business mainly to blame.
Georgia was named the top state for doing business and Rhode Island the worst.
The cable financial network said Connecticut has the fourth-highest cost of doing business, third-highest cost of living, and the nation's second-worst economy, put Connecticut in the bottom five.
“Unfortunately, these rankings reinforce the perception that Connecticut is not a good place to do business,” said John Rathgeber, CBIA’s president and CEO.
“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.”
Connecticut must also keep leveraging and investing in strengths such as education and talent, a skilled and productive workforce, technology and innovation, and access to capital.
According to CNBC, while Connecticut offers “world-class education and strong access to capital,” it is also “one of the most expensive states in the U.S., and this has hampered the economy.”
Connecticut actually improved in four of CNBC’s Top States subcategories but fell sharply (from #39 in 2013 to #49 in 2014) in the study’s economy subcategory—which is based on economic growth, job creation, the state’s fiscal health, and other factors, says the media network.
Another costly drop for Connecticut (from #43 to #47) was in the Cost of Doing Business category—based on state and local tax burdens; utility costs; wages; and rental costs for office, commercial and industrial space, among other things.
The problem is, those two categories—economy and cost of doing business—are weighted most heavily by CNBC in its ratings, so they combined to hurt Connecticut’s overall ranking.
However, the CNBC study was prepared earlier this year, using data that did not reflect the state's progress in several areas, including recent job growth, initiatives to reduce energy costs, and regulatory reforms.
This year, the Nutmeg State improved in these CNBC Top States categories:
- Infrastructure and Transportation (from #49 to #42)
- Workforce (from #37 to #32)
- Quality of Life (from #17 to #14)
- Business Friendliness (from #26 to #24)
Connecticut also remained at #5 for education, #21 for technology and innovation, and #48 for cost of living.
CNBC’s Top States, along with Forbes’s “Best States for Business” and other national studies, are barometers for how Connecticut is doing compared with our competitor states.
They’re also benchmarks for a new campaign called CT20x17 that aims to improve Connecticut’s economy and put the state into the top 20 of all major competitive rankings by 2017.
While the drop in the CNBC rankings in disappointing, Connecticut is in fact still one of the slowest-growing state economies in the nation and has regained only 60% of the jobs lost during the Great Recession.
The state has also grappled with fiscal problems over the past several years and faces steep deficits in the next biennial budget.
And businesses in the state have some of the highest energy, healthcare, regulatory, and employment and benefit costs in the nation—on top of state and local taxes.
The states that made dramatic improvements in the latest CNBC rankings did so as a result of policymakers' decisions to improve their business climates.
Statewide polls have shown that Connecticut's economy and job growth are the top priorities for the state's voters in the upcoming elections.
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.
CT20x17 is focusing on three areas in particular:
- More competitive costs: Either reduce costs or improve our economy so people can afford to live, work, and do business here.
- More dependable infrastructures to make sure our people and products can move more easily throughout Connecticut and into the world.
- Maintaining and improving the quality of life in Connecticut to make our state a place where people and businesses choose to live, work, and play.