TEXAS – Texas leaders, chiefly Gov. Greg Abbott, routinely tout the Lone Star State as the best place in the country to do business, and with good reason.

What You Need To Know

  • For the first time, Texas has fallen out of the top five in CNBC's annual "America's Top States for Business" ranking 

  • Texas this year landed at No. 6. It topped the list in 2008, 2010, 2012 and 2018

  • Reasons given for the drop include issues related to infrastructure as well as poor education and health care rankings 

  • Topping the list this year is North Carolina 

Every year since its inception in 2007, Texas has ranked in the top five of CNBC’s “America’s Top States for Business” list. In 2008, 2010, 2012 and 2018, it landed at No. 1.

Texas prides itself in creating a business-friendly atmosphere. There may be a crack on the wall now, however. For the first time, Texas dropped out of the top five on the 2023 list. It’s not all bad. Texas landed at No. 6, just ahead of Washington and one spot behind Minnesota.

Still, it’s worth looking at the reasons CNBC cites for this year’s lower ranking.

CNBC zeroed in on the Lone Star State’s infrastructure, specifically the power grid. While it has held up so far during a blistering summer, its failure during the winter storm of February 2021 likely contributed to the deaths of at least 246 people. CNBC also noted that Texans deal with nearly 20 hours per year without electricity, third-worst in the country, according to the Energy Department.

The infrastructure problems, CNBC said, extend to water as well. Texas will require $61 billion in repairs to water utilities over the next 20 years, according to the EPA.

CNBC further noted that Texas has dropped to No. 35 in the country for education in 2022, its per-pupil spending among the nation’s lowest.

Cost of living is another factor. While the state has no income or corporate tax, anyone who lives here knows property taxes are high and rent is skyrocketing in cities such as Austin.

Texas also fared poorly in CNBC’s “Life, Health & Inclusion” category. The state has the highest number of uninsured people in the country. Violent crime rose about 10% between 2018 and 2011, CNBC said, citing FBI statistics, and the state has targeted the LGBTQ+ community, particularly trans residents. CNBC also noted Texas’ near-total ban on abortions and a bill outlawing diversity, equity and inclusion offices at state-funded colleges and universities.

Still, it’s not all bad. Texas ranked as the second-best economy, after Florida, and it’s No. 1 in job creation.

CNBC ranked North Carolina No. 1 overall for business. Alaska came in last place.