Connecticut is starting out the new year with a dour assessment of its business climate and appeal to large-scale employers.
Forbes’s annual “Best States for Business” list, which takes into account factors such as labor costs, population growth, and quality of life, placed Connecticut at No. 43 in the nation for 2019.
The state held that same position on the prior year’s list.
In a summary of its findings, the finance magazine linked Connecticut’s lackluster score to severe income inequality, crippling business costs, and energy prices 62 percent higher than the U.S. average.
“The Nutmeg State rates fifth overall in quality of life thanks to low crime and poverty rates, a healthy populous, and strong schools,” Forbes researchers wrote. “But the regulatory climate and fiscal health rank among the worst in the nation.”
Broken down by category, Connecticut ranked No. 31 in labor supply, No. 43 in regulatory environment, No. 45 in overall business climate, and No. 48 in long-term growth prospects.
By Forbes’s reckoning, the cost of doing business in the state is about 8 percent higher than the national average.
While no state in New England or the Northeast more broadly was a standout on Forbes’s list, Connecticut was outperformed by all three of its immediate neighbors — Massachusetts (No. 19), New York (No. 28), and Rhode Island (No. 41).
The state’s low rank appears to underscore a popular talking point — that the state has become too expensive for residents and businesses alike — just as a slew of new taxes, on everything from dry cleaning to prepared meals to parking, come into effect for 2020. The new year could also see the legislature resume discussions on tolls, which have been championed by Gov. Ned Lamont and business allies in the southwestern part of the state but opposed by the state’s single largest business lobby, the Connecticut Business & Industry Association as an “additional cost burden.”
Low business costs, a deferential regulatory environment, and a AAA bond rating from Moody’s propelled North Carolina to No. 1 on Forbes’s list, followed closely by Texas, where Apple — lured in by some of the lowest taxes in the U.S. — plans to produce its redesigned Mac Pro desktop computer. Utah, Virginia, and Florida rounded out the top five on account of low labor force unionization rates, good long-term growth prospects, and high quality of life scores.
Louisiana, Hawaii, New Mexico, West Virginia, and Alaska — all tethered to sclerotic industries and beset by sluggish growth — were deemed the worst states for business, placing No. 46 to 50, respectively.
