MASS LIVE: Here’s one way that Massachusetts is better than Hawaii

By Scott Kirsner

This article originally ran in Mass Live on July 28, 2025.

If you’re considering moving your company from Massachusetts to the Aloha state, think again: CNBC has once again ranked it the only place that is more expensive than Massachusetts for running a businesses. And two of our New England neighbors, Rhode Island and Connecticut, are also pretty pricey, showing up among the ten most expensive states.

The cheapest? Oklahoma, Ohio, and Indiana.

But overall, there’s actually good news for the Bay State in these annual rankings of America’s Top States for Business: overall, we moved up from #38 to #20 since last year’s list was published, making us the “most improved” state.

The rankings take into account not only how expensive it is to run a business in each state, but also the quality of life, workforce, infrastructure, and technology and innovation activity, among other factors. We’re #5 on technology and innovation, and #10 for quality of life, just behind Nebraska but ahead of New Hampshire.

CNBC says that this year, the rankings added some new metrics “to gauge the states’ risks from a trade war and a shrinking federal budget.”

One relatively new coalition of business groups, the Mass Opportunity Alliance, is sounding the alarm about our poor showing on costs, firing off a press release yesterday to highlight our position as just a smidge cheaper than Hawaii.

Christopher Anderson of the Massachusetts High Tech Council is a co-organizer of the MOA group, which also includes the Massachusetts Competitive Partnership and the Pioneer Institute. Given that we’re in the early stages of a gubernatorial race, and that Governor Maura Healey last month named a new Secretary of Economic Development from the venture capital industry, I asked Anderson for the three things he’d want to see the state move the needle on, if we want to improve our position on next year’s list.

First, he mentioned income taxes. “You can’t keep senior executives here because of the new tax scheme in place,“ including the so-called ”millionaire’s tax,” a 4% surcharge on income over $1 million which took effect in 2023, he said. Massachusetts needs to think about ”the tax burden and its relationship to recruiting and retaining key talent” among these highly-paid workers, he said, who in an era of remote work can choose to live in another state, even if they are helping to run a Massachusetts-headquartered company.

Second, he mentioned the cost of energy. “I think the governor is hoping to make some progress on that front,” he said.

Third, Anderson cited a “state budget growing at a rate that’s unsustainable – and has been doing so for a long time.”

“If not for the millionaire’s tax, we would definitely be in a budget-cutting, expenses-above-revenue scenario here in Massachusetts.” Anderson said that the new tax is “masking some major overlooked, or long ignored, cost drivers in the state budget — thinks like debt service, state healthcare costs, and unfunded pension liabilities.”

Anderson, who has headed the Massachusetts High Tech Council since 2001, said that many business groups, elected officials, and cabinet secretaries feel like they need to be cheerleaders for Massachusetts’ strengths — like when it is named the most innovative state in the U.S.

But, he said, “what we need are more players on the field that are willing to work together, not politically with an agenda, but focusing on the key [factors] that are causing short-term and long-term challenges for the economy.”