New York Ranks No. 1 in Education in CNBC Report

But high cost of living helps keep Empire State in the middle of the pack

New York's unparalleled strengths and crippling weaknesses canceled each other out, leaving the Empire State right in the middle of the pack in a new report from CNBC on the best states for businesses.

A top ranking in education and second and third-place finishes in technology and innovation and access to capital were big positives in the annual report. But New York ranked near the bottom in cost of business, workforce quality and, not surprisingly, cost of living. The state fell two spots to No. 26.

“New York is a state of contrasts," said CNBC Senior Correspondent Scott Cohn. "It remains a leader in technology, innovation and access to capital for businesses. Its education system is unparalleled. But New York is still one of the most expensive states in which to do business and in which to live."

Virginia finished No. 1 in the report, followed by 2010 winner Texas.

See the complete list here

Cohn said New York showed modest improvement in the report's Cost of Doing Business category, but lost ground the Economy category, as growth slowed and legislators in Albany dealt with severe budget pressures.

Slideshow: Most expensive states

New Gov. Andrew Cuomo has made attracting and retaining businesses a top priority. Among his plans are tax breaks and energy subsidies for private sector employers.

"We have to put up a sign that New York is open for business, we get it, and New York is going to be a business-friendly state," Cuomo said in his first State of the State speech.

Rounding out the top five best states for business were: North Carolina, Georgia and Colorado. Rhode Island fared the worst in the nation, below Alaska, Hawaii, Mississippi and West Virginia.

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