OPINION: Mass. Still Has Big Competitiveness Challenges

A Statement from the Mass Opportunity Alliance

This week, CNBC released its annual “Top States for Business” rankings, which placed Massachusetts at No. 20 overall, an improvement over 2024 (No. 38). However, hold the champagne celebration: The state once again ranked among the country’s worst states for the cost of doing business at No. 49.

MOA’s original and ongoing research sheds more light on where the state has gone right – and wrong – in addressing its poor ranking.

The High Cost of Setting Up Shop in Massachusetts: We lead the nation in wage expenses and rank third nationally for utility costs. Our commercial and industrial real estate costs are also among the steepest in the country, adding another layer of expense for businesses looking to establish or expand operations in Massachusetts.

Steep Tax Burdens: Massachusetts’ corporate tax rate remains one of the highest in the nation. It also has one of the highest unemployment insurance (UI) tax rates in the nation, which falls on employers.

According to a May 2025 Pioneer Institute study, Massachusetts is only one of only four states to have lost private sector employment since 2020, while the rest of the country saw the private sector grow.

Some Progress Has Been Made: In 2023, the Governor signed a $1 billion tax relief package into law, and the recently-approved state budget does not include any new tax hikes. However, more can be done to reduce the burden for Massachusetts residents and businesses.

Housing Costs Are Also a Factor: 32 percent of voters identified reducing housing costs as the single most important issue they want the gubernatorial candidates to address in their campaigns—more than any other issue.

Mass. has some of the least affordable housing in the country, taking the No. 50 spot on Realtor.com’s ranking of all 50 states and Washington, D.C.

Generally High Cost of Living Overall: According to the Massachusetts Taxpayers Foundation, the Commonwealth ranks No. 47 in the country for its cost of living, No. 47 for average childcare costs, and No. 48 for energy costs.

Voters Support Plans to Lower Energy Costs: A majority of voters (56 percent) support expanding nuclear energy in Massachusetts as a way to increase reliability and reduce costs.

Governor Healey’s proposed Energy Affordability, Independence & Innovation Act would open the door to greater deployment of newer, more reliable nuclear energy facilities as part of a push to save ratepayers $10 billion over a decade.

Outmigration Crisis Remains an Issue: We have one of the worst outmigration rates in the country, exacerbated by the recent implementation of the wealth surtax on income over $1 million—a tax burden driving residents and workforce talent to other states.

What Business Leaders Are Saying

Christopher R. Anderson, president of the Massachusetts High Technology Council, which co-organized MOA along with the Massachusetts Competitive Partnership and Pioneer Institute, issued the following statement in response to CNBC’s 2025 analysis:

“It’s encouraging to see Massachusetts make overall gains, but our bleak business climate is a clear signal that we must act decisively and together to course-correct. High taxes, rising costs, and growing fiscal pressures are eroding our ability to retain talent, attract investment, and support thriving communities. We invite elected state leaders to join the growing number of business leaders and residents across Massachusetts who are committed to enacting forward-looking solutions that will restore our competitive edge and secure a stronger, more prosperous future for all.”

Jay Ash, president and CEO of the Massachusetts Competitive Partnership, added:

"With the adoption and now implementation of the Mass Leads Act and the Affordable Homes Act, the Administration and Legislature are taking steps to address major needs in our overall economy. While we can celebrate that, we can't lose sight of the continuing poor performance Massachusetts has on the ‘cost of doing business’ ranking, where we have been mired at No. 49 for several years. We need to realize that we're competing with other states that are far more affordable to host a business, hire employees, and experience lessor or no tax burdens. We need to address costs to keep businesses and people here, while attracting more of each."

Read our full analysis here.