In CNBC ranking, Virginia knocked from top spot as America’s best state to do business
Updated at 5:33 p.m., July 13 with comment from Gov. Glenn Youngkin.
Virginia has lost its coveted ranking as CNBC’s top state for business — a spot it’s held since 2019. Democrats say Gov. Glenn Youngkin’s politics are partly to blame.
“Governor Youngkin’s culture war and failed business practices are hurting Virginians and making our commonwealth less competitive,” said state Sen. L. Louise Lucas (D-Portsmouth) during a press conference Wednesday. “His political ambition is costing Virginia its world-class economic status. And that's a damn shame, if you ask me.”
The commonwealth now ranks No. 3 on the list, replaced by North Carolina in the top spot, followed by Washington at No. 2.
CNBC scored all 50 states in 10 broad categories: How well a state attracts workers, the condition of its infrastructure and the cost of doing business, among other topics.
This year, Virginia ranked highest in the “business friendliness” category, at No. 6, which is up from 11 in 2021. The category considers a state’s legal and regulatory framework and whether it overburdens business. It also weighs whether states embrace burgeoning industries, like cannabis.
Virginia ranked worst in the “cost of doing business” category, at 25, up from 26 in 2021. The category measures the strength of each state’s business tax climate, wage and utility costs, and the cost of office and industrial space.
The category also considers incentives and tax breaks that states offer to reduce business costs, with an emphasis on incentives that target development in disadvantaged communities.
The state saw the biggest year-over-year drop in the “workforce” category, where it ranked 11th, down eight spots from last year. That category focuses on the state’s ability to attract workers at all skill levels and its concentration of science, technology, engineering and math employees.
Jennifer Boysko (D-Fairfax) represents part of Virginia’s technology hub in Northern Virginia. She said Youngkin’s focus on socially-divisive issues, like abortion, drives away job creators.
“The companies who come to Virginia, the high-tech quality things like Amazon, want a welcoming and friendly Virginia,” Boysko said, crediting Democrats with enacting beneficial policies while also expanding broadband access across the state.
Youngkin downplayed the state’s No. 1 status last year when he was campaigning for governor. His team told CNBC, “Virginia may be number one for political correctness, pushing critical race theory in schools, and not requiring a photo ID to vote under Terry McAuliffe and Ralph Northam. But Virginia ranks among the worst states when it comes to things that actually determine the success of small businesses and opportunities for workers — cost of living and cost of doing business.”
On Wednesday, a member of the Youngkin administration reached out to VPM News with additional comments from the governor.
"[W]e're a top state for business in the ranking. And again, I'm very pleased with that," he said. "But I want us to be the best state for business. And that's going to require us to continue to get the cost of doing business and the cost of living down in Virginia."
CNBC included new metrics in its rankings this year, looking at the availability of child-care resources for employees, as well as support for emerging industries like cryptocurrency and cannabis.