NEW YORK – The Ocean State is not the worst state in the nation … it’s second-worst, according to Forbes.com’s 2010 Best States for Business and Careers ranking published on Oct. 13.
Rhode Island moved off the bottom spot it held last year to No. 49. Maine took over the title as the worst state in the nation for business and careers based on a rash of business closings over the past three years and one of the worst forecasts in the country for annual job growth, 1.3 percent over the next five years.
“When voters in 37 states select their governors next month, the overriding issue will be, of course, the economy,” Forbes said about its latest ranking while noting that most adults – 54 percent according to a CBS News poll - think that the economy and jobs are the most important issues for the United States right now.
In the fifth annual ranking, Utah was the best state for business, beating out four-time winner Virginia. Utah’s economy expanded 3.5 percent over the past five years, outgrowing every state except South Dakota. Other factors contributing to Utah’s success is a growing total employment rate, increasing household incomes and one of the lowest corporate tax rates in the country.
“We want to make sure we don’t have any nonsensical regulations that inhibit the private sector from expanding and having a profitable bottom line,” said Utah Gov. Gary Herbert. The state was ranked second-best in the regulatory component of the U.S. Economic Freedom Index produced by the Pacific Research Institute.
The ranking factors in 33 points of data into six categories important to businesses: costs, labor supply, regulatory environment, current economic climate, growth prospects and quality of life. Business costs – which include labor, energy and taxes - were weighted most heavily, Forbes said.
“The Northeast isn’t dead yet despite high business costs and crippling budget deficits,” said Forbes, pointing out ranking improvements by New York, New Jersey and Massachusetts.
The Bay State jumped to No. 16 from No. 34 despite its high business costs, which are 22 percent above the national average. The magazine hailed the state’s influx of venture capital money, second only to California, and its high college attainment rate. Massachusetts ranked No. 50 for business costs but No. 1 for quality of life.
Weighing on Rhode Island’s ranking were the regulatory environment and economic climate rankings (both 50th) and business costs (41st). Other factors included labor supply (34th), growth prospects (23rd), and quality of life (17th).