Top States for Business

The 10 worst states for business in America in 2015

Life at the bottom

n abandoned, graffiti-covered home stands adjacent to occupied properties in the Bywater neighborhood of New Orleans, Louisiana.
Derocl E/ Jomg;e | Bloomberg | Getty Images

We score all 50 states on more than 60 metrics in 10 categories of competitiveness. These include skilled workforce, cost of doing business, access to capital, infrastructure and economy. You can see our complete rankings and methodology here. These 10 states brought up the rear of our 2015 list, even though many offered a good quality of life.

—By CNBC's Scott Cohn
Posted 24 June 2015

10. Alabama

A pedestrian walks through a neighborhood with run down homes on March 6, 2015 in Selma, Alabama.
Getty Images

The Heart of Dixie is among the stingiest states when it comes to school spending, and test scores are among the nation's lowest. Like other Gulf Coast states, falling oil prices have hurt economic growth, and rising Medicaid costs have blown a hole in the state budget. On the positive side, the cost of living is low.

  • Total points: 1,141 out of 2,500
  • Best category: Cost of Living (No. 10)
  • Worst category: Education (No. 46)
  • 2014 rank: No. 34
  • 2015 rank: No. 41

Caption: A pedestrian walks through a neighborhood with run-down homes in Selma, Alabama

9. Vermont

The University of Vermont in Burlington, Vermont.
Denis Jr. Tangney | Getty Images

For all its natural beauty, the Green Mountain State has a hard time retaining the skilled workers its top-notch education system turns out. Those that remain in the state get snapped up quickly, creating some serious supply issues. Partly as a result, investment in the state is sparse and capital hard to come by. But quality of life here is consistently among the finest in the country.

  • Total points: 1,131 out of 2,500
  • Best category: Quality of Life (No. 2)
  • Worst category: Access to Capital (No. 48)
  • 2014 rank: No. 42
  • 2015 rank: No. 42

Caption: The University of Vermont campus in Burlington

8. Mississippi

Vicksburg, Mississippi
Peeter Visimaa | Getty Images

These are tough times in the Magnolia State, which is still trying to shake off the Great Recession. By our measures, its economy is the worst in the country, with the most sluggish housing market. Falling oil prices certainly don't help in a state that relies heavily on petroleum refining. The state's courts are notoriously unfriendly to business. But the cost of living is the lowest in the nation, and low wages make this the second cheapest state to do business in.

  • Total points: 1,096 out of 2,500
  • Best category: Cost of Living (No. 1)
  • Worst category: Economy (No. 50)
  • 2014 rank: No. 36
  • 2015 rank: No.43

Caption: Vicksburg, Mississippi, is a blend of old and new; it is home to the National Civil War Park.

7. Maine

Bagpipe music is in the air as members of the public and Friends of Stackpole Bridge visit the Scottish-designed drystone Stackpole Bridge that is closed on Simpson Road in Saco. Money has been raised to have the bridge rehabilitated instead of being replaced with a contemporary bridge and supporters hope the Saco City Council will approve the rehabilitation.
Gordon Chibroski | Portland Press Herald | Getty Images

The average Maine worker was responsible for about $90,000 in output in 2013—the most recent data available at the time of our study—giving the Pine Tree State the dubious distinction of having the least-productive workforce in the nation. Business infrastructure is minimal, and the state's bridges are among the worst maintained in the country. But if you can get past that, Maine offers a classic New England environment and superb quality of life.

  • Total points: 1,084 out of 2,500
  • Best category: Quality of Life (No. 5)
  • Worst category: Workforce (No. 50)
  • 2014 rank: No. 45
  • 2015 rank: No. 44

Caption: The Scottish-designed Stackpole Bridge in Saco, Maine, closed for rehabilitation.

6. Nevada

Construction of the Tesla Gigafactory just outside Reno, Nevada, as of February 18, 2015
James Glover II | Reuters

The Silver State was our most improved state in 2014, thanks to explosive job growth. That growth has continued, but with other states catching up and surpassing Nevada, the economic recovery is no longer enough to overcome the state's nagging weaknesses. They include the worst education system in the nation, with large classes and low test scores. Nevada did win the coveted $5 billion Tesla Gigafactory in 2014, but it could be years before the state recoups the $1.25 billion in incentives it is paying for the privilege.

  • Total points: 1,076 out of 2,500
  • Best categories: Cost of Doing Business (No. 24), Business Friendliness (No. 24)
  • Worst category: Education (No. 50)
  • 2014 rank: No. 29
  • 2015 rank: No. 45

Caption: Construction of the Tesla Gigafactory outside Reno, Nevada

5. Louisiana

An abandoned drilling rig in New Orleans, Louisiana.
Hal Bergman | Getty Images

Yet another Gulf Coast state hobbled by the falling price of oil, Louisiana logged the third worst year-over-year job creation in the nation between April 2014 and April 2015. But that's not the only reason the Pelican State has one of the worst state economies. The state budget situation has been a mess, with a $1.6 billion shortfall heading into this year's legislative session. The state has been trying to counter that with tax reform and generous incentives, but it's a long slog.

  • Total points: 1,062 out of 2,500
  • Best category: Cost of Doing Business (No. 10)
  • Worst category: Economy (No. 48)
  • 2014 rank: No. 40
  • 2015 rank: No. 46

Caption: An abandoned drilling rig in New Orleans

4. Alaska

Oil rig in Prudhoe Bay, Alaska.
Gary Braasch | Getty Images

No state relies more heavily on oil than Alaska, but plunging prices are just the beginning of the troubles in the Last Frontier. Even when the price of oil is high, Alaska is one of the most expensive states in which to live and do business. On the positive side, its workers are the most productive in the country, and with the worsening economic slump, there are plenty of them available to hire.

  • Total points: 1,041 out of 2,500
  • Best category: Workforce (No. 9)
  • Worst category: Economy (No. 49)
  • 2014 rank: No. 47
  • 2015 rank: No. 47

Caption: An oil rig in Prudhoe Bay, Alaska

3. Rhode Island

Goat Island Lighthouse and Newport harbor, Rhode Island.
John Greim | LightRocket | Getty Images

Looking on the bright side, this is the highest Rhode Island has ever finished in our rankings. Otherwise, things are pretty gloomy in the Ocean State. Of the state's 766 bridges, 23 percent are structurally deficient—one reason the state has the worst infrastructure in the country. The state is expensive, and the regulatory burden is high. The state does do relatively well in education and quality of life, but it has considerable work to do.

  • Total points: 1,036 out of 2,500
  • Best category: Quality of Life (No. 12)
  • Worst category: Infrastructure (No. 50)
  • 2014 rank: No. 50
  • 2015 rank: No. 48

Caption: Goat Island Lighthouse in Newport Harbor, Rhode Island

2. West Virginia

A huge bridge spanning the New River Gorge, West Virginia
John _Brueske | Getty Images

The Mountain State is deep in the valley when it comes to technology and innovation; funding for scientific research is limited. Business can be buried in an avalanche of regulations in this notoriously unfriendly state. But cost of doing business is among the lowest in the country.

  • Total points: 994 out of 2,500
  • Best category: Cost of Doing Business (No. 7)
  • Worst category: Technology & Innovation (No. 50)
  • 2014 rank: No. 48
  • 2015 rank: No. 49

Caption: A bridge spanning the New River Gorge in West Virginia

1. Hawaii

Freezing lava covering a road in the Volcanoes National Park, road sign 'road closed'
Rolf Schulten | Ullstein Bild | Getty Images

With its high utility bills, pricey rent and limited business incentives, the Aloha State is the most expensive state in which to do business. And while it is difficult to compare the infrastructure on an island chain to that of the mainland, Hawaii's roads and bridges are in terrible shape. Hawaii's workforce is heavily unionized, though it is productive. Of course, you may be tempted to dismiss all the negatives in exchange for being top in the nation for quality of life.

  • Total points: 945 out of 2,500
  • Best category: Quality of Life (No. 1)
  • Worst categories: Cost of Doing Business (#50), Cost of Living (No. 50)
  • 2014 rank: No. 49
  • 2015 rank: No. 50

Caption: Freezing lava covers a road in Volcanoes National Park in Hawaii