Top 5 states for business

The economy may be looking better for some states this year, but budget woes are a challenge from east to west. In its fifth annual ranking of America’s Top States for Business, CNBC for the first time took into account state budget gaps among the 43 metrics that go into its rankings. That made for some interesting changes this year, with last year's Nos. 1, 3, and 5 states falling while other states climbed in rank. Here are the Top 5 states for business:

- Scott Cohn, CNBC Senior Correspondent

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The Denver skyline sits in the early morning light in this Dec. 2, 2002, file photo. Colorado slipped a couple notches in CNBC's ranking of top states for business, but still made No. 5, thanks in part to improving infrastructure and transportation. (David Zalubowski/AP/File)

5. Colorado

The Centennial State slipped to the No. 5 spot in CNBC's 2011 ranking of top states for business, having placed third last year. Competitors aside, Colorado improved its own overall score by 56 points (1,512) from a year ago, only to finish one point behind the No. 4 state this year.

The Centennial State took its largest forward leap in the infrastructure and transportation category. Yet Colorado fell from its 2010 rankings in six of the 10 categories, including cost of doing business, quality of life, economy, education, technology and innovation, and business friendliness.

By far the largest fall came from the state economy category, pushing Colorado 18 spots lower on the pecking order in that category.