July 11, 2008

Rhode Island 48th Most Attractive State to Business (Again)

Marc Comtois

CNBC rated the business climate of the 50 states. Well, at least we didn't get worse....


Interestingly, while RI was pretty static in most categories, there were gains in Workforce and Education (almost into the upper 1/3 in each). Here is CNBC's description of each category, respectively:

Many states point with great pride to the quality and availability of their workers, as well as government-sponsored programs to train them. We rated states based on the education level of their workforce, as well as the numbers of available workers. We also considered union membership. While organized labor contends that a union workforce is a quality workforce, that argument, more often than not, doesn’t resonate with business. We also looked at the relative success of each state’s worker training programs in placing their participants in jobs....

Education and business go hand in hand. Not only do companies want to draw from an educated pool of workers, they want to offer their employees a great place to raise a family. Higher education institutions offer companies a source to recruit new talent, as well as a partner in research and development. We looked at traditional measures of K-12 education including test scores, class size and spending. We also considered the number of higher education institutions in each state.

It appears as if the aforementioned gains were offset in the overall rankings by a big dive in the ranking of Access to Capital, which CNBC explains
Companies go where the money is, and venture capital—an increasingly important source of funding—flows to some states more than others.
Plus we're still way at the bottom in most other categories. So it would appear that the business climate in this state is so poor that even our relatively attractive workforce can't lure businesses to open up shop. Instead, they stay away. And that young and educated workforce? They leave.

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Hey, we sure showed Hawaii(49) and Alaska(50). Maybe next year we can surprise West Virginia (47)!

Posted by: observer at July 11, 2008 4:03 PM

Hooray, Johnny!

I am so proud of you and your report card this semester! You got a "D-!!"

That is great that you maintained your average and did not slip into an "F."

You are the best Hillbilly in the Northeast!

Posted by: Citizen Critic at July 11, 2008 4:38 PM

Are we going to hear from the Hawaii Apologist about how great his state, with the highest sales tax in America (taxes EVERYTHING including your food and underware) is?

Posted by: Mike at July 11, 2008 7:16 PM

Mike - you beat me to it.

I too was going to ask if Aloha-Ken was going to lecture us on what a great state HI is and how we need to follow their lead.

Yes Ken, RI has been taking your advice and we have almost caught up to your model state.

Fret not Rhode Islanders ...RI is still in the Top 10 to work in if you are a Public Employee sucking on the Taxpayers tit.

Particularly if you are a Teacher working a mere 185 days a year, 6.75 hours per day for $70k, near free healthcare, and retirement in your 50s. Indeed, it is a GREAT State.

Posted by: George Elbow at July 11, 2008 10:42 PM

"Are we going to hear from the Hawaii Apologist about how great his state, with the highest sales tax in America (taxes EVERYTHING including your food and underware) is?"

Um, isn't that the basis for the GOP's supposed "fair" tax?

Posted by: Jake at July 11, 2008 11:00 PM

The Fair Tax is intended to replace the federal income tax, not to be in addition to it. Of course, that would require a constitutional amendment, which as you know, is a very difficult process. That being said, it is not something that I presently favor, because I'm not sure just how well it would work in the real world. I've had some minimal experience with the Value Added Tax (VAT) in Europe, and I see too many similarities. In the interim, a flat tax would be a much better alternative.

As for Rhode Island, if you only count the 48 continental United States, we're leading the way (down the road to perdition)!

Remember, in a free country -- which Rhode Island is still nominally a part of -- people make choices everyday. If one state is in 48th place, and Massachusetts is considered 15th, it doesn't take a whole lot of effort to move your family or business to enjoy whatever benefit there may be. I've had family members and several businesses cross the border. Lower sales tax, no TDI, etc. Unlike Hawaii, there's no ocean separating us from the mainland -- people can escape if they choose to do so.

Posted by: Will at July 12, 2008 12:51 AM

For those of you who asked for a comment!

I’ll still take HI (female Republican Governor and Democratic GA) at CNBC rating #49 with a projected state-wide growth rate of 3% sitting in the middle of the Pacific Ocean and projected budget surpluses over RI (male Republican Governor and Democratic GA) ranking #48 with a growth rate of 0.1% (dropping) and projected $100 million or more budget deficit sitting on the mainland with truck/land and rail access to other states.

What is the basic difference between living in Rhode Island and Hawaii for a retired 62 year old person who spent years working in private R&D and government services?

1. If you own a $400K house in Providence, RI your property taxes would be 2007/2008 rate $22.84 X (100%) $400K = $9,136.00. The age exemption starts at 65 or 62 on social security disability.

1a. If you own a $400K house in Honolulu, HI your property taxes would be 2007/2008 rate $3.29 X (100%) $320K = $1,052.80 (A City property Tax rebate returned: 2007=$200 and 2008=$100).

1aa. There is an age exemption applied to above of $40,000 in Honolulu. $80,000 exemption is applied to real property (55-59=1.5 X exemption; 60-64= 2 X exemption; 65-69= 2.5 X exemption; 70 and older = 3 X exemption). If exemption is greater than real property then must pay minimum tax of $100 a year.

2. Assume during the year living in Providence you fill you 250 gallon heating oil tank 3 times for heat only and let’s assume heating oil is $4.00 a gallon which would equal $4.00 X 750 = $3,000.00.

2a. If you live below 3,000 foot level in Honolulu no supplemental heating is required except an extra blanket. Average daytime temp is 83 and nighttime is 72 with ocean water at 78 degrees year round and cool trade winds.

3 You own a car worth $16,000 in Providence your property tax will be $76.78 X $16,000 = $1,228.48.

3a. There is no property tax on motor vehicles, boats or motorcycles in Hawaii.

4. Assume during the year you drive 12,000 miles in RI and your car averages 30 miles per gallon and RI gasoline tax is 31 cents per gallon which would equal $124.in taxes.

4a. Assume during the year you drive 12,000 miles in HI and your car averages 30 miles per gallon and HI gasoline tax is 32.6 cents per gallon which would equal $130.40 in taxes

5. Assume during the year you spend approximately $20,000.00 on taxable goods and services living in RI which would equal 7% sales tax X $20,000 =$1,400.00

5a. Assume during the year you spend approximately $20,000.00 on taxable goods and services living in Honolulu, Hawaii which would equal 4.5% excise tax X $20,000 = $900.00.

6. Retirement Income in Rhode Island: Railroad Retirement benefits are exempt. Out-of-state government pensions are fully taxed. Social Security is taxed to the extent it is federally taxed. All income is subject to RI state income tax.

6a. Retirement Income in Hawaii: Social Security, military, federal, state/local, and some private pensions (contributory type) are exempt. All out-of-state government pensions are exempt from HI state income tax.

Providence Honolulu
RI HI Tax/Cost
$9,136.00 $1,052.80 Property tax
$3,000.00 $ 0.00 Heating
$1,228.48 $ 0.00 Car tax
$ 124.00 $ 130.40 Gasoline tax
$1,400.00 $ 900.00 Sales tax
$14,888.48 $2,082.80 SUB TOTAL
Fully Taxed No Tax State Income tax



Hawaii has a nationally ranked public mass transit system which blankets the whole Island of Oahu and all neighborhoods with accessible (green and energy efficient hybrid engine buses) transportation and commuter boats; $2 one-way or $40/month. This system is being added on each major island.

In the County of Honolulu on Island of Oahu a 0.05% surcharge was added Jan 2007 to fund the construction of the $3.7 billion 20 mile East-West elevated light rail transit system which construction is slated to start in 2009. The 0.05% surcharge is valid up to year 2022. During the first six months of the fiscal year $53.8 million was collected and a total of over $230 million has been collected via the surcharge to date. Hawaii prepays projects instead of banking on Federal dollars.

Hawaii and capitol city Honolulu is an international ranked city, and tourist destination. Honolulu is ranked #1 city in USA to raise a family by Best Life Magazine, #2 cleanest city in world to live in by Forbes Magazine, #12 best city in the world by Monocle Magazine, #1 city with smallest carbon foot print by Brookings Institution (Honolulu is also the largest city in the world stretching more than half way across the 48 contiguous states) and #28 (highest ranked USA city) by Mercer Consulting in the “Quality of Living” global city rankings survey. Hawaii is the only state in the USA that is closest to providing universal health care for the total state population and sister island Maui 2008 was voted in the 20th annual CONDE NAST TRAVELER Readers’ Choice Awards Poll “Best Pacific Island” (for the 17th consecutive year) and “Best Island in the World” for the 13th time.

After being born, raised and living in RI most all my live, I had to ask what is RI known for besides political corruption, high taxes, cold weather, smallest state in nation, dirty beaches plus being closed down due to sewage flows, poor government services, bad public transportation, drugs, questionable law enforcement departments, very poor infrastructure, declining drinking water quality, looming deficits, can’t manage a 6” total winter snow storm without gridlock and being a welfare and immigration state.

There is an old saying; people living in glass houses should not throw stones.

Gee, if I don’t see you on the beach each day or at the local hang outs, I won’t wait for you!

Posted by: ken at July 12, 2008 2:34 AM

I do believe the Governor is trying to force the public school system into administering a proper education and hopefully, this will foster a healthier and more qualified workforce.

There are several reasons why RI cannot produce high school graduates deserving to wear a cap and gown. A school system that cannot and will not change, a teachers union that cannot and will not change and finally, ill equipped parents that cannot and will not accept that their children may not be Einstein and that they just might be slobbering idiots.

No business venture above the levels of landscaping or trash picking (both of which are covered by illegals), would even bother scoping out RI to possibly lay down business roots.

Why would an IBM, Honeywell, Microsoft, Bose, Texas Instruments or a GE possibly consider RI as an expansion site? Where are the enticements like a friendly business climate, an inviting tax base, schools of higher education other than RIC or CCRI? What about crime rate in the capital city? Even G-tech wanted to run away.

Where's the accessible and affordable public transport? Why is PUC in bed with National Grid thus reducing our disposable income?

Just what does RI have to offer that would attract a large business?

Maybe a few left wing nutjob journalist positions at the Providence Journal? Don't they already have enough?

Posted by: Roland at July 12, 2008 2:45 AM

Of course Ken the only $400,000 houses in Honolulu are inhabited by dogs!
Rather than go through all your misleading figures I will rely on the dozens of ex-Hawaiians I have spoken to in Las Vegas (where a third of native-born Hawaiaans now live) who repeatedly say "you can't live there".
The idea that people are abanondoning a tropical paradise in droves in favor of the desert wasteland that is Vegas for any other reason than raw economic desperation is absurd.

Posted by: Mike at July 12, 2008 8:54 AM

Hawaii is expensive, but at the very least it appears that you actually get something for your money. Hawaii is a world class tourist destination. Why WOULDN'T a tropical paradise --one of the best places in the world-- which is isolated by thousands of mile of sea, be expensive?

Rhode Island is only world class at authoritarianism, corruption, taxation, and welfare. The Vanderbilt types stopped coming to RI in the year 1900.

You want some symbolism? Hawaii has Mauna Loa, and Rhode Island has the ever growing Mouth Trashmore in Johnston.

Posted by: Citizen Critic at July 12, 2008 1:15 PM

I don't know Mike, when it comes to housing, Vegas is merely at the forefront of the housing collapse. We returned from their recently and were amazed to see newer 3-4 bedroom homes with abandoned cars out front. Yeah, Hawaiians may be moving in to get a lot more home for their money, but a quick MLS search of Oahu & the big island show that just north of $300k can get you in there as well - and not in a "dog house" (LOL). I know property tax is high on my list of reasons for selling and squandering my meager pension elsewhere. You are right about the NV desert though... the constant brown gets oppressive.

Posted by: rhodeymark at July 12, 2008 2:08 PM


If you don’t know, Las Vegas is considered the 9th island because there is no gambling allowed in Hawaii. There are special all inclusive weekly trips to Las Vegas from Hawaii.

People moving from Hawaii to Las Vegas do so because of size of property (house/land) for the price paid. You can get a larger house lot and house in Las Vegas than in Hawaii. Most move because it is felt too much development is going on in the islands driving up prices and removing open space land. Also some move because of better jobs for their technical expertise.

As for living in Las Vegas looking at desert and brown all year would drive me crazy along with the high summer heat and sweat sucking dryness. Nice place to visit.

The figures I used are all true and not made up except where I indicated let’s assume a number. If you can’t accept living in Hawaii is $12,805.68 plus State of RI Income tax a year cheaper than living in Providence, RI then its your loss and my gain.

Here is a link that will show you a $398,000 new Hawaii “Dog House” that you refer to in a new development walking distance to the beach on Island of Oahu.


Posted by: Ken at July 12, 2008 4:54 PM

Rhode Island of Hawaii? Tough choice.

With the exception of Ken, you people have got to be kidding.

Posted by: McLenclos at July 14, 2008 1:40 PM

Actually, the voters of Rhode Island have got to be kidding. For decades, leaving control of the state in the hands of the party which has given us the fourth highest taxes, the 48th worst business climate, expensive schools which perform poorly ...?

Yup, gotta be a joke.

Posted by: Monique at July 14, 2008 3:23 PM

I don't know how it could have possibly stayed the same.

Posted by: SPECIAL K at July 15, 2008 1:28 AM



I was wrong when I said; “2. Assume during the year living in Providence you fill you 250 gallon heating oil tank 3 times for heat only and let’s assume heating oil is $4.00 a gallon which would equal $4.00 X 750 = $3,000.00.”

7/15/08 PROJO just reported heating oil in RI is now $4.749 a gal so 2 should read as follows:

2. Assume during the year living in Providence you fill you 250 gallon heating oil tank 3 times for heat only and let’s assume heating oil is $4.749 a gallon which would equal $4.749 X 750 = $3,561.75"

This would increases living in RI cost by additional $561.75 over what I reported that is not required by living in Honolulu, HI.

Also National Grid in RI raised electric cost by 21% adding about $25 per month per average customer bill and also raised natural gas cost by 10%.

It will be a costly winter living in RI.

Posted by: Ken Williamson at July 15, 2008 6:30 PM
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