RI back to dead last in new CNBC rankings

Raimondo counters, 'We’re a new state from the one you’ve heard about before'

PROVIDENCE, R.I. (WPRI) – Gov. Gina Raimondo and other state leaders say Rhode Island is making significant strides in becoming a better place to do business. So far, though, CNBC doesn’t seem to agree.

The business network ranked Rhode Island 50th out of 50 on its 2016 Top States for Business list, which was released Tuesday afternoon. It marks a new PR setback for the state, which had inched up to 48th place in 2015 after previously ranking last in 2014 and 2012.

“This year’s Bottom State for Business, the Ocean State is overflowing with issues, including poor infrastructure and a weak economy,” the network said in a headline.

Among the categories examined by CNBC, Rhode Island was held back most by its poor infrastructure, which ranked worst in the nation. State leaders have argued the RhodeWorks law passed earlier this year, which creates new truck tolls to help fund billions of dollars in bridge and road repairs, will address such criticisms.

But Rhode Island was also near the bottom in four other of CNBC’s 10 categories: Access to Capital, Cost of Doing Business, Economy, and Cost of Living. The state did best in Education, where it ranked 20th, though even that was far behind next-door Massachusetts, which once again took first place on schools.

“Rhode Island has never finished better than 48th since we began rating the states in 2007,” CNBC’s Scott Cohn wrote in an article examining the state’s problems.

The CNBC list and its methodology have plenty of critics, particularly on the left. But Rhode Island’s ruling Democrats have made clear over the years that they care a great deal about the state’s perennially poor showings on this list and other national business-climate rankings.

“It doesn’t matter whether those surveys are real or unfair – they’re there, and we’re judged on them,” Senate President M. Teresa Paiva Weed said in 2013.

While CNBC said Raimondo did not know the state’s ranking before they were published, the governor nevertheless agreed in advance to write an op-ed for CNBC’s website defending the state, published along with the rankings Tuesday.

“We’re a new state from the one you’ve heard about before, and the world is noticing that Rhode Island is open for business,” Raimondo wrote. She argued the state is still suffering from the decline of the once-dominant local manufacturing industry.

“As we lost thousands of jobs; we didn’t do enough to position our state for growth in fast-growing, advanced industries; and put off decisions that would make Rhode Island competitive in the 21st century,” she wrote. “As a result, we developed an unfortunate reputation as a bad place for business. But because of recent bold moves from our leaders, that’s changing.”

In a separate interview with Cohn, Raimondo urged him: “Take a fresh look at Rhode Island.”

Cohn did, and noted some of her initiatives that he suggested could pay dividends. But he also included a note of skepticism: “To hear the governor tell it, Rhode Island is just a few years away from becoming a little business powerhouse. … But Raimondo is not the first Rhode Island governor to claim that the state has turned over a new leaf.”

Indeed, former Gov. Lincoln Chafee published his own rebuttal to the rankings on CNBC’s website in 2013. “The effort to build a world-class infrastructure, educate a 21st-century workforce and create a more effective state government is paying off,” Chafee declared at the time.

Since Raimondo succeeded Chafee last year, the first-term Democrat has collaborated with Assembly leaders on a number of initiatives they said would improve the business climate, including tax cuts on energy and unemployment insurance, as well as major new subsidies for economic development.

Massachusetts ranked far higher on the new CNBC list: 20th, unchanged from 2015. Connecticut was closer to Rhode Island but still ranked a number of spots ahead, at 43rd, despite a major fiscal crisis and GE’s recent decision to move its headquarters elsewhere. The top five states overall were Utah, Texas, Colorado, Minnesota and North Carolina.

Here is how Rhode Island ranked in the 10 categories examined by CNBC:

  • Access to Capital: 45 (2015: 43)
  • Business Friendliness: 39 (2015: 45)
  • Cost of Doing Business: 45 (2015: 44)
  • Cost of Living: 43 (2015: 42)
  • Economy: 45 (2015: 39)
  • Education: 20 (2015: 13)
  • Infrastructure: 50 (2015: 50)
  • Quality of Life: 24 (2015: 12)
  • Technology & Innovation: 35 (2015: 33)
  • Workforce: 23 (2015: 24)

Ted Nesi (tnesi@wpri.com) covers politics and the economy for WPRI.com. He writes The Saturday Morning Post and hosts Executive Suite. Follow him on Twitter, Facebook and Instagram

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