Hawaii ranks last in CNBC’s 2026 state business survey

Hawaii finished last in CNBC’s 2026 America’s Top States for Business rankings, with the network assigning the state the lowest marks in the country for infrastructure and the cost of doing business. The result also reflected a weaker contribution from quality of life, a category where Hawaii still ranked sixth but lost ground because of limited access to affordable childcare.

The state’s geography shapes several of the disadvantages identified by CNBC. Its distance from the mainland raises the cost of goods and business activity, while limited land constrains development. Some infrastructure measures used for mainland states, such as freight rail, have little relevance for an island chain, CNBC said.

Childcare has become a central part of Hawaii’s competitiveness challenge. Child Care Aware of America said childcare in the state costs 18% of median income for a married couple with children, the highest share in the nation. Hawaii has 531 licensed childcare facilities for a population of about 1.4 million, placing it 21st in childcare centers per capita, according to CNBC’s report.

The National Institute for Early Education Research said Hawaii met all of its quality benchmarks last year, but ranked near the bottom for access. That split matters for CNBC’s methodology because childcare availability can affect labor force participation, particularly in households where all adults work.

Yuuko Arikawa-Cross, director of Hawaii’s Executive Office on Early Learning, told CNBC that early learning is important for children’s development and that “in about 60% of households with children, all adults are working.”

State targets broader pre-kindergarten access

Hawaii has been trying to expand early learning capacity through a 2020 law requiring programs for half of otherwise unserved three- and four-year-olds by 2027 and full coverage by 2032. Arikawa-Cross told CNBC the state is on course to meet the 50% benchmark next year.

CNBC began including childcare in its rankings in 2022 after the U.S. Chamber of Commerce identified childcare gaps as one reason workers were leaving jobs or not returning to employment. In ranking terms, childcare affects quality of life because the availability and cost of care can determine whether parents can take or keep work.

Hawaii’s quality-of-life score has historically helped offset its weaker cost and infrastructure metrics, according to CNBC. In 2026, that buffer was smaller. CNBC ranked Hawaii as having the fourth-highest cost of living, in addition to its last-place finishes for infrastructure and business costs.

Funding and political uncertainty weigh on the effort

Arikawa-Cross told CNBC that early childhood programs face budget pressure at state and local levels. She said her office receives no direct federal funding except for one position, but officials are watching the possibility of federal cuts to Head Start.

The expansion effort has also lost its most visible political advocate, at least temporarily. Lieutenant Gov. Sylvia Luke, who created the Ready Keiki early learning initiative in 2023, said in April she would take an indefinite leave after confirming she was the target of a state campaign finance investigation. She did not admit wrongdoing and suspended her re-election campaign.

A state campaign spending commission disclosed this month that it had filed a multi-count civil complaint in May against Luke and five others, according to CNBC. Luke’s attorneys have asked for the civil case to be paused because of an ongoing criminal investigation.

Ready Keiki brought together government agencies, nonprofit groups and philanthropic organizations to support the state’s universal childcare target. Arikawa-Cross told CNBC that Luke’s absence leaves “a very large void,” but said the office intends to keep working toward the statutory deadlines.

This story draws on original reporting from CNBC.