To Rhode Islanders, the national business-climate rankings that place the Ocean State at or near the bottom each year now look like self-fulfilling prophecies.
Rhode Island’s economy is weak and its government perceived as inefficient, so it sinks low in the rankings, which become a deterrent to outside investment in the state, further weakening the economy, stretching budgets and feeding back into the cycle of low rankings.
Frustration with this dynamic bubbled over – again – this fall in the Rhode Island Public Expenditure Council’s state-commissioned study of economic development and at The Rhode Island Foundation’s Make It Happen RI forum.
In both cases, groups concluded that the rankings themselves, apart from the underlying conditions that drove them, are slowing Rhode Island’s economic recovery.
And both recommended a task force to study the metrics that drive the most influential rankings and develop a set of strategies to bump Rhode Island up the lists.
“Since Rhode Island consistently ranks poorly in business-climate reviews, RIPEC recommends that the governor create a working group to analyze the various studies that rank business climates across all 50 states,” RIPEC said in its Sept. 25 report. “This analysis should determine ways for Rhode Island to improve its current rankings and should include working with the various organizations that publish the rankings.”
This isn’t the first time RIPEC has highlighted Rhode Island’s low marks on national business-climate reports.
In the fall of 2010, the business-backed fiscal watchdog issued a 15-page report calling for action to address a consensus in the five most prominent national rankings that Rhode Island’s tax and regulatory structures are among the most burdensome in the country.
Despite a series of tax-reform proposals, some of which were enacted, and much discussion about a regulatory overhaul, two years later the state is in broadly the same spot in the five primary rankings RIPEC examined as it was then.
Cable-television channel CNBC, which ranked Rhode Island second to last in its Top State for Business report in 2010, ranked the Ocean State dead last the past two years.
The Tax Foundation’s list of states with the most business-friendly tax climate ranked Rhode Island 47 out of 50 in 2010 and moved it up one spot to 46 in 2011 and 2012. (The Tax Foundation rankings are done by fiscal year, so the report that came out in October was for the fiscal year 2013 that started in July.)
PBN is now accepting applications for its newest award program and event for RI & Bristol County to celebrate the Manufacturing Renaissance that is evolving regionally and across the country. The deadline for applications is March 20th.
PBN's annual Book of Lists has been an essential resource for the local business community for almost 30 years. The Book of Lists features a wealth of company rankings from a variety of fields and industries, including banking, health care, real estate, law, hospitality, education, not-for-profits, technology and many more.