North Carolina has gained another high ranking from a business-climate study.
This time, the state is listed third in CNBC’s 13th annual America’s Top States for Business. It trailed Virginia and Texas.
The 2019 ranking ties with 2011’s as the highest for North Carolina. The state has averaged a No. 6 ranking, with a low of 12th in 2013.
North Carolina’s ranking in the six primary categories swung widely from first in economic performance to 35th in quality of life.
The rankings in the other categories are:
- No. 7 for workforce quality.
- No. 17 for infrastructure.
- No. 21 for quality of education.
- No. 21 for cost of doing
- in the state.
“While economic growth here pales in comparison to Washington and Utah, no state’s economy is on more solid ground than the Tar Heel state,” CNBC said, emphasizing the growth in the Charlotte area in particular.
“The housing market is healthy and state finances are sound. The state attracted some $2.6 billion in venture capital in 2018, the sixth highest figure in the nation. It is also attracting skilled workers, who are moving to North Carolina in droves,” the cable business-news network said.
It is Virginia’s fourth time as the top-ranked state, along with 2007, 2009 and 2011.
CNBC cited Virginia as having the nation’s best workforce, including the fourth-highest concentration of science, technology, education and math workers, as well as “strong school test scores, small class sizes and a wealth of colleges and universities make Virginia’s education system the best in the nation.”
CNBC also took into consideration Virginia Tech’s plans to build a new campus adjacent to Amazon’s second-headquarters campus.
Business-climate rankings have evolved over the past 12 years into a cottage industry that states and often politicians use to spotlight their marketplaces and puff out their chests as proof of their economic prowess.
North Carolina’s Republican legislative leaders often cite the state’s high ranking with Anderson Economic Group, Chief Executive magazine, Forbes magazine, CNBC, George Mason University, FitSmall Business.com, Site Selection magazine’s Prosperity Cup, the Tax Foundation and U.S. News & World Report as proof of their hard economic work, particularly with tax reform.
For example, North Carolina was the only state to rank among the Top 20 states in Forbes’ six main socio-economic categories for its 2018 report. The rankings are: second for business costs; ninth for regulatory environment; 10th for growth prospects; 11th for labor supply; 16th for quality of life; and 18th in economic climate.
The Republican-controlled N.C. General Assembly has reduced the state’s corporate tax rate from 6.9% in 2013 to 3% in 2017 — the lowest in the country for states that have a corporate tax rate. The result has led to a $600 million annual reduction in corporate tax dollars paid to North Carolina.
The state corporate tax rate is scheduled to drop to 2.5 percent in 2019.
Economists, however, tend to believe that states and their politicians are limited in what they can do to grow their economies outside of how the national economy is performing.
John H. Boyd, a site-selection expert based in New Jersey, has said that business-climate rankings “are a valuable marketing arrow in the quiver of North Carolina’s economic development foot soldiers.”
A 2018 report titled “Corporations over Carolinians?” from the left-leaning N.C. Justice Center said that “North Carolina’s corporate tax-rate cuts failed to fix our most pressing economic problems.” The co-authors are Patrick McHugh, an economic analyst for the center’s Budget & Tax Center, and Alexandra Sirota, its director.
Corporate tax-rate cuts “have failed to create pathways out of poverty or generate enough jobs that pay a living wage,” the authors wrote. “Continuing to cut taxes will only undercut our ability to invest in people and communities.
“By reducing our commitment to vital public goods, like schools, roads and health care, corporate tax cuts are putting North Carolina’s economic future at risk.”