Updated March 27 at 9:27am
small business

Rhode Island is one of the worst for small businesses and entrepreneurs


OAKTON, Va. – Rhode Island is one of the worst states in the nation for its public policies important to small business and entrepreneurship, according to the Small Business and Entrepreneurship Council’s 15th annual ranking.

The council ranked the Ocean State 45th among the 50 states and the District of Columbia for the “costs and burdens of government on small business and policy areas that enable their competitiveness and growth.”

“The Small Business Survival Index 2010 shows which states are most in need of improving their competitiveness and what particular policy areas need changes so entrepreneurs and investors can get the economy and job creation back on track,” said Raymond J. Keating, author of the study.

“Establishing a pro-entrepreneur, pro-investment policy climate is critical to a healthy economy and to sound government budgeting,” said Keating. The index this year includes 38 government-imposed or government-related costs that affect small businesses and entrepreneurs, such as taxes, regulatory costs and energy costs.

The Top 10 states on the index were: South Dakota, Nevada, Texas, Wyoming, Washington, Florida, Alabama, South Carolina, Ohio and Colorado.

The bottom 10 were: Minnesota, Massachusetts, Hawaii, Rhode Island, Maine, Vermont, California, New York, New Jersey and the District of Columbia.

The SBE pointed to Rhode Island’s high corporate income and corporate capital gains taxes, high property taxes, high unemployment taxes, highest number of health insurance mandates (No. 51), high electric utility costs, high gas and diesel taxes, and the state’s poor private property protections as weighing on its ranking.

It also came in last place for highway cost effectiveness, behind Alaska, California and Hawaii.

Nevertheless, on the ranking of state and local sales, gross receipts and excise taxes, the Ocean State earned 15th place, 16th for number of government employees, 17th for crime rate, and 12th in a three-way tie with Maryland and Tennessee for its workers’ compensation benefits.

“It must be noted that countless issues play into human decision-making. But the impact of public policy often is very important. The relative governmental costs among the states will impact where people live and work, that is, where they seek opportunity,” said the study.

For more information, click here to download the PDF file.


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Is it just a coincidence that there is an exact inverse correlation between the best states to do business and where people want to live?

Tuesday, December 14, 2010 | Report this

Here's some help for existing R.I. small businesses and individuals thinking about launching a small business. Rhode Islanders now have the opportunity to learn the essential building blocks of successful self-employment, free of charge, from leading entrepreneurs and other industry experts. The educational programs start in January.


Wednesday, December 15, 2010 | Report this

Geoffrey: you raise a good point. I mean, do I want to move to TX or FL and bring my business? As pissed as I get at this state at times, this is a great area to live and play. I do pity those who have to rely upon our roads, though.... and for those who have to deal more extensively with the state than do I, I can only say I'm glad I don't feel your pain....

Wednesday, December 15, 2010 | Report this

Is it possible that we tax businesses to death and that's why we continue to be on the bottom of the list?

Tuesday, April 26, 2011 | Report this
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