In 2024, Virginia ranks as the top state for business in America, boasting the country's top schools and robust infrastructure.

• Virginia earns its sixth straight victory in CNBC's annual state competitiveness rankings, and its third in five years, with North Carolina finishing a close second.
• The country's best public education system was achieved through a bipartisan compromise.
• Virginia ranks third in infrastructure development, thanks to its ability to connect businesses with prepared construction sites.
• Texas, Georgia and Florida round out the top five states in 2024.

In 2024, Virginia is ranked as America's top state for business due to its exceptional education system and policies that allow companies to thrive.

Virginia has achieved its sixth ranking as the top state in CNBC's study, and its third win in five years, a record unmatched by any other state since the study began in 2007. Additionally, Virginia has finished in the top half or better in each of the study's 10 categories this year.

Despite receiving billions of federal dollars for infrastructure development, Virginia ranks third in the country for infrastructure quality, according to a CNBC study.

Virginia is one of America's most accessible states, both physically and virtually. With 121 million people within a day's drive, it is easily accessible. Additionally, an estimated 70% of global internet traffic flows through Northern Virginia, making it one of the most accessible states virtually. Despite this, Virginia's power grid, which is one of its few weak spots due to reliability issues, is being put under strain by the huge concentration of data centers. However, Virginia residents and businesses can easily tap into all that internet traffic with excellent broadband connectivity.

The state of Virginia stands out for its robust infrastructure, particularly in the abundance of shovel-ready sites it provides for businesses looking to construct quickly. The state's economic development agency has approved numerous sites throughout the Commonwealth, ensuring that all necessary utilities and infrastructure are in place within 18 months.

Michael Dreiling, vice president of real estate solutions for the Virginia Economic Development Partnership, stated that Virginia works diligently to hear companies' concerns and that these companies are emphasizing the need for prepared sites.

The Site Selectors Guild, a group that collected data for the CNBC study, stated that Virginia's program is among the most advanced and well-funded of its kind in the country.

Chairman Seth Martindale stated that states that prioritize site readiness and infrastructure improvements have experienced significant success in the past two to three years.

Virginia's education advantage

The CNBC study ranks Virginia's education system as the best in the country, giving it a significant competitive advantage.

The State Higher Education Executive Officers Association reports that state support for higher education has increased by 28% over the past five years. Virginia is among the states that offer a wealth of higher education opportunities, including five historically Black colleges.

According to the National Education Association, Virginia has some of the most individualized K-12 instruction in the country, with an average of 10.9 students per teacher last year. This seems to be reflected in the state's solid test scores.

In his State of the Commonwealth address in January, Gov. Glenn Youngkin stated that we renewed the focus on career and technical education by reestablishing expectations of excellence through intensive tutoring, adopting the science of reading, launching lab schools.

Virginia's education successes are more complex and collaborative than Youngkin's victory on the education issue in 2021 suggests.

In November, when Democrats gained control of the Virginia General Assembly, they opposed the education funding cuts in Youngkin's budget. Eventually, the two sides reached a compromise that included $2.5 billion in new funding for K-12 schools and 3% pay raises for teachers and state workers.

Divided government pays dividends in Virginia

One way that a divided government has helped to moderate Virginia politics is through the education compromise.

The Democrats and Youngkin reached a deadlock in budget negotiations earlier this year, resulting in a plan that neither increased nor decreased taxes. High business costs are Virginia's greatest weakness, according to the CNBC study. By maintaining a steady tax rate, Virginia managed to remain in the top half of the rankings, with the 24th lowest business costs in the country.

Youngkin's attempt to implement a 15-week abortion ban was hindered by Democrats, who argued that the ban would harm the state's ability to attract younger workers.

Youngkin contends that the state must take action to draw in more talent, as the state's workforce, despite its strong reputation, ranks ninth in the CNBC rankings this year due to a shortage of educated workers relocating to the state.

""For the past decade, more individuals have left Virginia than moved to it from the other 49 states, according to data," Youngkin stated in January."

Although Virginia's "gridlock-is-good" formula is not always effective, Youngkin's plan to attract the National Basketball Association's Washington Wizards and the National Hockey League's Washington Capitals to Alexandria by creating a new sports and entertainment district failed due to concerns about the cost and the impact of Virginia politics.

In March, Ted Leonsis, owner of Monumental Sports & Entertainment, announced that he would keep the teams in D.C. and took a dig at the rivalry across the Potomac.

He stated that doing business in Washington, D.C. is easier and better than in Virginia.

The District is not included in the CNBC rankings because it is not a state.

Scoring all 50 states

This year, Virginia has been named the most competitive state in the country, with a score of 1,595 points out of a possible 2,500, according to a CNBC study that evaluated all 50 states across 10 categories.

We measure the states based on the criteria they use to pitch themselves to business by assigning a weight to each category based on how frequently states cite it as a selling point.

Here are this year's categories and point totals:

• Infrastructure: 425 points (17%)
• Workforce: 375 points (15%)
• Economy: 350 points (14%)
• Quality of Life: 325 points (13%)
• Cost of Doing Business: 275 points (11%)
• Technology & Innovation: 250 points (10%)
• Business Friendliness: 250 points (10%)
• Education: 125 points (5%)
• Access to Capital: 75 points (3%)
• Cost of Living: 50 points (2%)

The rest of the Top States

In 2024, the CNBC rankings for Top States produced the closest finish in history, with just three points separating Virginia from North Carolina. North Carolina, which had finished first in 2022 and 2023, was hoping to achieve an unprecedented three-peat. However, despite a strong performance, North Carolina fell to No. 20 in Infrastructure, the heaviest-weighted category in 2024.

The rapid growth of the state may have contributed to the utilities being a major culprit in the need for more than $20 billion in repair and maintenance over the next 20 years, according to the U.S. Environmental Protection Agency. Electricity customers in North Carolina are facing nearly eight hours without power per year, according to the most recent data from the U.S. Energy Information Administration.

Texas, which had dropped out of the top five for the first time in 2023, is now ranked No. 26 for Infrastructure due to power grid issues and lack of site readiness program. Despite having the best workforce in the nation, Texas finishes last for Quality of Life due to poor health care, weak worker protections, and the nation's strictest abortion ban.

Georgia maintains its No. 4 ranking on the strength of its infrastructure, including the world's busiest airport, but falls to 40th for Quality of Life.

Florida ranks fourth in the nation for economic growth and job growth, but its infrastructure is a concern due to extreme climate risk. The power grid is the least reliable in the country, and high insurance premiums and an uptick in foreclosures are also issues. Despite these challenges, Florida's housing market has performed well.

This year, Alabama has improved significantly and moved up 22 places to rank No. 20 overall. The state's net migration has increased, and its worker training programs have performed better, leading to a three-way tie for 24th place in the Workforce ranking, up from No. 44 last year. Additionally, Alabama's outstanding site readiness program helped it move up five spots in Infrastructure to No. 8.

America's worst states for business

If there are Top States, then there must also be Bottom States.

Montana, known as Big Sky Country, faces challenges in terms of infrastructure development due to limited space on the ground.

The least-educated workforce in America is found in Louisiana, which ranks No. 47. Additionally, the state's economy is negatively impacted by a struggling housing market.

Despite its vast area, Alaska has the nation's worst infrastructure, with little space for development and the worst broadband service.

The worst economy in the nation, Mississippi finishes at No. 49 due to its stagnant economy and the lowest worker participation rate.

Hawaii is predicted to be America's least business-friendly state in 2024 due to its high costs, particularly for child care, and increasing climate risks.

Hawaii has experienced significant challenges in recent years, including devastating impacts on both human and economic levels. The Covid-19 pandemic severely affected the state's tourism industry in 2020, while the Maui wildfires in August added to the state's woes. Despite these challenges, state forecasters predict that tourism will remain flat in 2021, both in terms of the number of visitors and the money they spend. However, this presents an opportunity for Hawaii to recover and bounce back in the years to come.

If your state is not mentioned in America's Top States for Business rankings, you can still see the overall completion and rankings in all 10 categories of competitiveness in the full report.

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