Massachusetts has tumbled to the middle of pack in CNBC’s latest ranking of best states for business, falling from sixth to 28th in a new survey published Tuesday, marking the “biggest decline” of any of the 50 contenders, according to the cable news station.
Top honors this year went to Texas, a state about as different as one could get from Massachusetts in terms of ideology, geography and climate, but also one that competes with the Bay State for some of the same companies.
Gov. Deval Patrick has frequently cited the state’s relatively high ranking in the CNBC survey as proof of positive business conditions here, but, in the wake of the new survey, the governor chose to focus on those economic indicators telling a more positive story.
“Over the last several years, Massachusetts has cut corporate taxes and burdensome regulations, reduced health care and energy costs and continued record investments in education, innovation and infrastructure. Our growth strategy consistently gets results – we’ve seen sixth straight months of job growth and our unemployment rate is well below the nation’s as well as many of the states listed in CNBC’s top ten,” Patrick said in a prepared statement.
“These rankings confirmed our strengths in access to capital, education and technology and innovation. We will build off of them and continue to advance our proven growth strategy until the Commonwealth’s economic recovery is complete,” the governor continued.
But Massachusetts now ranks 49th in cost of doing business, down from 41st, which was one reason for the drop, according to CNBC. Other factors included a lagging economy, which went from 15th to 21st, and infrastructure, which reflected the state’s biggest decline from 29th to 45th.
The new figures come amid a wide variety of mixed signals, including in statewide and localized jobs reports.
In Gloucester, for example, the city’s unemployment rate for May fell to a jobless rate of 6.3 percent, according the state’s Executive Office of Labor and Workforce Development, the city’s best mark in at least the last four years.
But the city’s modest job gains over the last two years, statistics show, are virtually offset by a drop in Gloucester’s overall workforce -- a statistic many analysts attribute in large part to a number of people who remain jobless, but whose unemployment benefits have expired, meaning they’re no longer accounted for in the state’s documentation. House Minority Leader Brad Jones blasted Patrick’s leadership in a statement following the release of the survey, predicting that the governor would try to challenge the validity of the findings. He also called attention to Republican-sponsored jobs legislation filed earlier this year, some of which has found its way into other bills.
“As if the news couldn’t get any worse for Massachusetts residents, CNBC ranks the Commonwealth 49th in cost of business, ahead of only Hawaii. These latest numbers are egregious. The residents of Massachusetts deserve better…,” Jones said. “We can no longer afford to accept excuses from Governor Patrick when it comes to jobs and job creation. Massachusetts needs jobs now.”
Despite the year-to-year drop in the business channel’s ratings, the Massachusetts unemployment rate stood at 6 percent in May, two points lower than the 8.2 percent national rate. The state’s unemployment rate fell by more than a point over the past year, and is also below the 6.9 unemployment rate in Texas for May 2012.
But Massachusetts also ranked higher than every other New England state, with the exception of New Hampshire, where high energy and health care costs can often be a deterrent to business expansion. Rhode Island ranked 50th in the 2012 survey.
However, Senate Minority Leader Bruce Tarr, R-Gloucester, said CNBC’s evaluation showed the state still has some ways to go.
“If someone evaluates us and finds areas that we can improve we should pay attention to those,” Tarr said, adding, “Evaluations like this are the reasons that we persist in putting issues on the table to grow the economy and create jobs.”
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