The state scored highest in its workforce and education system. Out of 2,500 possible points in nine categories, Virginia led all states with 1,610, followed by Texas, which was No. 1 last year, at 1,589 and North Carolina at 1,586.

Virginia scored lowest in its cost of living, at 35th, which CNBC attributed primarily to the high labor costs necessary for skilled workers in high-tech industries. Duval, with the state chamber, dismissed that concern, but said the low ranking reflects the state’s tax structure, especially at the local government level.

“I think this points to the need for tax reform,” he said.

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For Northam, the ranking showcases the state’s efforts to diversify its economy so as to rely less on federal defense spending. Since he took office 18 months ago, the state has added $18.5 billion in new capital investment and created more than 50,000 jobs, he said.

While much of that investment has been focused in Northern Virginia and other population centers, the governor said his administration has sealed economic development deals that will bring $2.5 billion in capital investment and create more than 8,000 jobs in rural areas and economically distressed communities.