Mass. Climbs In “States For Business” Rankings

Rights, Inclusion Grades Offset Low Cost Of Living Assessment

AUG. 15, 2023….Massachusetts moved up nine spots in CNBC’s annual America’s Top States for Business rankings this summer and the man behind the scorecard of states told the Mass. High Tech Council that he is beginning to put more emphasis on things like reproductive rights and inclusion when he ranks states.

CNBC’s Scott Cohn gave his rundown on the Bay State’s competitive position Tuesday at a time when multiple entities are trying to define what makes Massachusetts competitive. Business groups like the High Tech Council and others have long warned that the state is becoming a less desirable place to live, work or run a business because of recent changes in state tax policy and a chronically high cost of living. But Gov. Maura Healey has instead focused on framing Massachusetts’ competitiveness in terms of the rights, freedoms and benefits that Bay Staters enjoy.

Massachusetts came in 15th place in the CNBC rankings for 2023, improving nine spots from its 24th place ranking in the 2022 standings and landing roughly in line with 2021’s 14th place finish. The state earned the highest ranking in the Northeast and slotted in right behind Arizona and just ahead of Pennsylvania.

Each year’s rankings consider a slightly different set of criteria, Cohn said, and Massachusetts has bounced all around over the years — as high as fifth on the list (2010) and as low as 28th (2012).

The 2023 rankings are based on 86 metrics in 10 broad and weighted categories of competitiveness. The network said each category is given weight “based on how frequently states use them as a selling point in economic development marketing materials.”

“That way, our study ranks the states based on the attributes they use to sell themselves,” CNBC’s coverage of its rankings said.

This year, he said, the “life, health and inclusion” category looked at the usual things like air quality, child care access, anti-discrimination protections and crime rate, but added a new emphasis on reproductive rights in the wake of the U.S. Supreme Court’s Dobbs decision that overturned Roe v. Wade abortion protections.

“Based on the data that shows that women and families are particularly looking at the laws now as they decide where they’re going to go, we felt that it was important,” Cohn said.

Cohn said one of the things he plans to focus on as he prepares for the 2024 state rankings is further defining what quality of life means and “how important these things like discrimination protections, abortion rights and things like that really mean in terms of people migrating to a state or from a state for that reason.”

He also mentioned that he had a chance to speak with Healey earlier in the year when they both spoke at the Mass. High Tech Council’s annual meeting. Cohn said he came away impressed.

“As someone who has made a lot of her mark as a progressive governor, she is certainly very business savvy, very competitive, wants all of you to succeed, wants the state to succeed. She talked about the quality of life issues in terms of inclusiveness, and how that is, she expects, a selling point for the state of Massachusetts,” Cohn said.

He added, “And I’m interested to see that because I’ll tell you, if you want to anger a bunch of Texans, say that they’re number 50 for ‘life, health and inclusion,’ which we did. And that contributed to Texas falling out of the top five for the first time since we’ve done this study. … But that’s sort of an interesting thing and an interesting debate that will go on because what we do know is that despite everything that we said about states like Texas and Florida, people are still moving there in droves.”

In June, Healey announced that billboards highlighting LGBTQ+ couples had gone up across Texas and Florida — states that recently peeled back rights for people the governor says she will protect in Massachusetts. The billboards read “Massachusetts For Us All” and were part of a $750,000 campaign launched by the Massachusetts Office of Travel and Tourism.

Healey has also supported changes to the state’s short-term capital gains and estate taxes as ways to keep the Bay State competitive, but divided Beacon Hill Democrats have so far been unable to agree on a bill they could send to the governor’s desk.

“I don’t want to see people going to Texas or to — I mean, Austin’s cool, but whatever — or to Florida, you know, North Carolina. But this is the dynamic right now,” Healey said in early March when she pitched her tax plan to business leaders.

In the CNBC rankings, Massachusetts saw its standing improve over last year in five of the 10 categories, lost ground to other states in two categories, and saw no change from 2022 in three categories.

The static categories were significant ones. Massachusetts again ranked 49th out of 50 states for the cost of doing business ahead of only Hawaii, 47th for the cost of living ahead of Hawaii, California and Oregon, and 26th for the economy broadly. The Bay State slipped from 31st to 34th for infrastructure and also lost the 1st overall ranking for education for the first time since 2014, falling to third place behind Virginia and Illinois.

“In education, I know it’s been a point of pride in Massachusetts to be number one and you have almost every year that we’ve done this,” Cohn said. “The education system is still strong, great test scores, school spending is good, higher education support is good. But we do look at community colleges and that is not as much of a priority in the state, and higher education funding declined a bit. So that moved you down.”

Improvements from 2022 came in the categories of workforce (24th to 13th); life, health and inclusion (13th to 8th); business friendliness (21st to 19th); and access to capital (6th to 3rd).

And though it lost the education crown, the Bay State did claim another number one ranking from CNBC this year. Massachusetts jumped from 10th to a first-place tie with California for technology and innovation in the 2023 rankings.