Connecticut climbed eight spots in CNBC’s annual ranking of “Top States for Business,” reaching 31st on this year’s list.
The rise continues a roller coaster ride for the state, which climbed to 24th in 2021 before falling back down to 39th last year.
“While turning the ship around cannot be completed overnight, we are appreciative that the business community is recognizing the policy improvements the Lamont administration has implemented, which is resulting in improved rankings on lists such as this, and we want to continue this momentum,” Adam Joseph, a spokesman for Gov. Ned Lamont, said in a statement.
Connecticut Business and Industry Association President and CEO Chris DiPentima said this year’s ranking is an accurate representation of Connecticut’s progress and where it stands nationally.
“That’s very significant and, I think, very reflective of how the state’s moving relative to being a good state to do business,” he said, noting Connecticut was one of the biggest movers on the list.
Connecticut still lags behind neighboring states Massachusetts, which ranked 15, and New York, 20, but the gain means the state is above the rest of New England. Maine ranked 39 this year, followed by New Hampshire, 40, and Rhode Island, 45.
Many organizations attempt to rank states on economic criteria, but DiPentima said CNBC’s tally is “the one that we look at as the most credible and reliable.”
Connecticut made big improvements in several areas, according to CNBC. The state moved up 11 spots on cost of living, up to 34.
CNBC also said Connecticut improved relative to other states on infrastructure, the economy, business expenses, quality of life and cost of living.
The network still gave Connecticut a D-plus for cost of living and D for cost of doing business and the economy, though.
“At the same time that we have a positive direction, there are some serious issues that I think need to be addressed,” said Senate Minority Leader Kevin Kelly, R-Stratford. “Otherwise, this is not going to be sustainable.”
DiPentima said he hopes the state can build on this momentum by addressing some of its shortcomings.
Connecticut actually fell in rankings for workforce and education, two traits policymakers and business leaders have long touted as the state’s strengths.
Connecticut still received a B-plus on education, despite falling five spots to 13th this year. It earned a C-plus for workforce and fell seven spots to 21st.
“That should really start to sound some alarms that the state really needs to start focusing on what we need to do to make sure that the best and the brightest remain here,” Kelly said.
DiPentima said housing and childcare costs are the main reasons Connecticut’s workforce is lagging.
“It’s part of the infrastructure package, if you will,” he said. “It’s just as critical as rail transportation and good highways and roads and bridges for people to commute back-and-forth to work.”
DiPentima noted Connecticut still has roughly 100,000 unfilled jobs and said the state can recruit more talent by making it easier for young families to live here. He also said women’s participation in the workforce is down as some mothers have responded to the cost of childcare by staying home.
Senate Majority Leader Bob Duff, D-Norwalk, agreed, saying he expects housing will continue to be a priority for lawmakers next session.
“We’re way behind on that and one of the only ways we’re going to keep graduates in the state, keep people moving into the state is to increase the denominator of housing,” he said.
Duff and Kelly also said they want to expand workforce development — Duff with vocational programs through the Connecticut State Colleges and Universities system and Kelly with more apprenticeship opportunities.
DiPentima said the state’s workforce development system is sufficient to meet employers’ needs, it’s simply a matter of making Connecticut an attractive place to live.
He said the income tax cut included in the newly adopted budget will help improve affordability for families. He also said the state has to bring down business costs, though.
Duff questioned Connecticut’s ranking, chalking it up to high labor costs. But DiPentima and Kelly said the state also needs to cut taxes on businesses.
Kelly also said the legislature needs to find ways to bring down healthcare costs. He was disappointed the Senate failed to vote on a bill that would allow trade associations to pool together and purchase insurance, a proposal his caucus was pushing.