News Summary
Tennessee has achieved the eighth position in CNBC’s annual ranking of the Top States for Business for 2024. The state excelled in the overall cost of doing business, ranking first, thanks to low taxes, advantageous utility costs, and a favorable job market. However, it faces challenges in areas like quality of life and education. With a 3% unemployment rate and various new tax reforms, the state continues to attract businesses while working on improving living conditions for its 7.2 million residents.
Tennessee has secured the eighth position in CNBC’s annual ranking of the Top States for Business for 2024, solidifying its status as a competitive environment for companies looking to operate in the United States. The study evaluated states based on 128 metrics categorized into ten broad areas of competitiveness, allowing a comprehensive analysis of each state’s business climate.
A standout metric for Tennessee was its performance in the category of overall cost of doing business, where it ranked first. This achievement is attributed to the state’s low tax burden, right-to-work status, and reasonable utility costs, making it an attractive location for businesses. Additionally, Tennessee demonstrated GDP growth of 1.7% in the first quarter of 2024, indicating a healthy economic environment.
As of May 2024, Tennessee’s unemployment rate stands at a notably low 3%. This figure reflects the state’s effective workforce initiatives and economic policies designed to foster job creation and sustainability. One significant legislative development contributing to this improved economic landscape is the upcoming Tennessee Works Tax Act, which will take effect on July 1, 2024. The act involves various tax reforms, including a single sales factor apportionment method and a standard excise tax deduction of $50,000. Moreover, it includes expansions of property tax exemptions and an extended carryforward period for tax credits.
Despite its recent successes, there are areas of concern regarding the state’s living conditions. Tennessee ranks poorly in quality of life, landing in the 45th position in this category among the states. The state currently reports a GDP of approximately $549.7 billion, coupled with a median income of $41,556 for its residents. With a population around 7.2 million, only 39.7% have obtained a college degree, indicating room for improvement in education outcomes.
In further evaluations, Tennessee ranked 32nd overall in U.S. News & World Report’s best states listing, a decline from its previous rankings of 24th in 2023 and 27th in 2024. The state holds the 24th position for its economy, reflecting metrics such as $3.18 of venture capital per GDP, exceeding the national average of $3.15. However, the job growth rate is at 1.3%, slightly below the national average of 1.5%. The net migration rate of 1.2% is above the national average, indicating a steady flow of new residents to the state.
In terms of educational attainment, Tennessee ranks 31st overall, with an average student debt of $14,149—higher than the national average of $13,720—and a graduation rate of 87.3%, which exceeds the national average of 85.8%. However, the state struggles significantly in healthcare, positioned at 41st, with 13.3% of the population uninsured, compared to the national average of 10.2%.
The violent crime rate in Tennessee is a significant concern, reported at 628 per 100,000 residents—nearly double the national average. Tennessee also ranks 23rd in infrastructure, with a reported commitment to utilizing only 5.4% renewable energy, which falls short of the national average of 10.8%. These factors highlight the complexities of living and conducting business in the state.
Various governmental programs, like the Drive to 55 initiative, are in place to enhance workforce training and increase the number of college-educated residents in Tennessee. The state’s supportive tax structure and policies aim to attract a diverse range of industries, although challenges such as crime rates and educational outcomes remain prevalent. In comparison, Virginia was designated as the best state for business for 2024, while Hawaii received the lowest ranking.
The findings from CNBC’s study emphasize that successful management and investment in infrastructure and workforce development are critical elements that contribute positively to a state’s overall business climate.
Deeper Dive: News & Info About This Topic
- Area Development: Top States for Doing Business in 2024
- Wikipedia: Taxation in the United States
- Tennessean: Tennessee — America’s Best States for Business in 2024
- Commercial Appeal: Best States to Start Business
- Encyclopedia Britannica: Business
Author: STAFF HERE KNOXVILLE WRITER
KNOXVILLE STAFF WRITER The KNOXVILLE STAFF WRITER represents the experienced team at HEREKnoxville.com, your go-to source for actionable local news and information in Knoxville, Knox County, and beyond. Specializing in "news you can use," we cover essential topics like product reviews for personal and business needs, local business directories, politics, real estate trends, neighborhood insights, and state news affecting the area—with deep expertise drawn from years of dedicated reporting and strong community input, including local press releases and business updates. We deliver top reporting on high-value events such as Dogwood Arts Festival, Big Ears Festival, and Knoxville Asian Festival. Our coverage extends to key organizations like the Knoxville Area Chamber Partnership and United Way of Greater Knoxville, plus leading businesses in healthcare, education, and energy that power the local economy such as Covenant Health, University of Tennessee, and Tennessee Valley Authority. As part of the broader HERE network, including HEREBristol.com, HEREChattanooga.com, HEREMemphis.com, and HERENashville.com, we provide comprehensive, credible insights into Tennessee's dynamic landscape.
