CNBC& CNBC.com Present Coverage with Senior Correspondent Scott Cohn Revealing America's Top 5 States for Business Throughout CNBC's Business Day Programming and Online on Tuesday, July 9th
ENGLEWOOD CLIFFS,N.J., June 19, 2013— As the U.S. begins to shake off the effects of the Great Recession, states are slowly but surely, getting their finances in order. But every policy decision aimed at plugging a balance sheet hole brings with it the risk of long-term pain for businesses. So which state will perfectly calibrate the levers to become this year's Top State for Business?
Starting Monday, July 8th through Thursday, July 11th, CNBC, First in Business Worldwide, will broadcast the results of its seventh annual study of America's Top States for Business.The network will build a special event around this CNBC exclusive study with the complete rankings being revealed, along with the winning state, on Tuesday,July 9th, throughout the network's Business Day programming. The complete ranking for all 50 states will be available on CNBC.com and include an in-depth look at each of their respective rankings.
CNBC Senior Correspondent Scott Cohn will broadcast live from the top-ranked state starting Monday, and will count down CNBC's 2013 list of America's Top States for Business Tuesday,beginning on "Squawk Box" (6AM-9AM ET) with the top state being revealed on"Closing Bell with Maria Bartiromo" (3PM-5PM ET).
On Tuesday, July 9th, CNBC.com will reveal, in conjunction with on-air, the complete list of America's Top States for Business rankings. In addition, topstates.cnbc.com will feature a wealth of coverage about each state including economic snapshots (employment,budget, tax and housing data) and exclusive stories and slideshows drilling down into the various top-ranking categories including Technology, Quality of Life and Most Improved States.
Follow us on Twitter @CNBC and take part in the social conversation using hashtag #TopStates.
To determine the rankings for America's Top States for Business, each state was scored—using publicly available data—on 55 different measures of competitiveness developed with input from business groups including The National Association of Manufacturers and The Council on Competitiveness as well as the states themselves. States received points based on their rankings in each metric, which were then separated into ten broad categories. The categories are weighted based on how frequently they are cited as selling points in state economic development marketing materials. That way, we grade the states on the criteria they use to sell themselves.
So what makes a state great for business? The ten broad categories and the maximum possible points for each:
- Cost of Doing Business (450 Points) – Cost is a major consideration when a company chooses a state. We looked at the state and local tax burden in each state, including individual income and property taxes, as well as business taxes and gasoline taxes. Utility costs can add up to a huge expense for business, and they vary widely by state. We also looked at the cost of wages, as well as rental costs for office, commercial and industrial space (rental cost information furnished by CoStar Group).
- Economy (375 Points) – A solid economy is good for business. So is a diverse economy, with access to the biggest players in a variety of industries. We looked at basic indicators of economic activity, including growth, unemployment and the health of the residential real estate market. We measured each state's fiscal health by looking at their credit ratings and outlook, as well as state revenues as compared to budget projections. We also gave credit to states based on the number of major corporations located there.
- Infrastructure & Transportation (350 Points) – Access to transportation in all its modes is key to getting your products to market and your people on the move. We measured the vitality of each state's transportation system by the quantity of goods shipped by air, waterways, roads and rail. We looked at the availability of air travel in each state, the quality of the roads, bridges and the water supply, as well as the time it takes to commute to work.
- Workforce (300 Points) – Many states point with great pride to the quality and availability of their workers, as well as government-sponsored programs to train them. We rated states based on the education level of their workforce, as well as the numbers of available workers. We also considered union membership and the states' right-to-work laws. While organized labor contends that a union workforce is a quality workforce, that argument, more often than not, does not resonate with business. We also looked at the relative success of each state's worker training programs in placing their participants in jobs.
- Quality of Life (300 Points) – The best places to do business are also the best places to live. We scored the states on several factors, including the crime rate, health care, local attractions, parks and recreation, as well as environmental quality.
- Technology & Innovation (300 Points) – Succeeding in the new economy—or any economy—takes innovation. The top states for business prize innovation, nurture new ideas, and have the infrastructure to support them. We evaluated the states on their support for innovation, the number of patents issued to their residents, the deployment of broadband services, and the record of high tech business formation. We also considered federal health and science research grants to the states.
- Business Friendliness (200 Points) – Regulation and litigation are the bane of business. Sure, some of each is inevitable. But we graded the states on the "friendliness" of their regulatory frameworks to business, with particular attention to the legal and liability climates.
- Education (150 Points) – Education and business go hand in hand. Not only do companies want to draw from an educated pool of workers, they also want to offer their employees a great place to raise a family. Higher education institutions offer companies a source to recruit new talent, as well as a partner in research and development. We looked at traditional measures of K-12 education including test scores, class size and spending. We also considered the number of higher education institutions in each state and long term trends for funding higher education.
- Cost of Living (50 Points) – The cost of living helps drive the cost of doing business. From housing to food and energy, wages go further when the cost of living is low.
- Access to Capital (25 Points) – Companies go where the money is, and venture capital flows to some states more than others. We looked at the flow of capital to states in absolute terms as well as in proportion to the size of their economies.
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