Rhode Island (No. 37): Taxing Matters
Rhode Island continues to lag the rest of New England in economic recovery. Growth of gross state product remains tepid, and unemployment is still high at 9 percent. The New England Economic Partnership forecasts “moderate” hiring over the next few years, paced by job hiring in construction, financial services, office services, leisure and hospitality, education, healthcare and technology. Rhode Island’s 7 percent sales tax, second-highest in the U.S., handicaps retailers and burdensome estate taxes hasten out-of-state retirements. The Tax Foundation ranks Rhode Island 6th highest for tax burden out of 50 states, and ranks it 46th in its State Business Tax Climate Index. Rhode Island spends over $356 million annually on incentives, according to The New York Times. The most popular programs are sales tax refunds and corporate income tax credits. Food companies are the top recipients.
Vermont (No. 39): Population and Labor Force Declining
Energy, food, forestry and transportation are Vermont’s key industries. Vermont’s labor force and its overall population declined last year, deepening concerns of local business leaders. The New England Economic Partnership forecasts economic growth in most sectors except government through 2017, with construction, leisure/hospitality, business services and natural resources adding jobs. The Green Mountain State spends over $407 million per year on incentive programs, according to The New York Times, primarily sales tax refunds and exemptions. The top recipients are manufacturers, followed by agricultural interests.
Maryland (No. 40): Regulation Rising
Heavily reliant on federal government spending, Maryland’s economy suffered from federal budget cutting and other effects of sequestration last year. Sector growth is led by transportation services, concentrated on the Port of Baltimore and connected intermodal services. The Free State is also a major center for life sciences research and development, home of the country’s fourth-largest biotech cluster. Administrative services, largely dependent on the federal checkbook, employ large numbers. Regulatory and tax changes have added complexity and increased tax bite, according to the Tax Foundation, which ranks Maryland 15th best in the nation, and 41st in its State Business Tax Climate Index. The Maryland Chamber of Commerce is pressing to reduce the corporate tax rate. The state spends over $554 million per year on incentive programs, according to The New York Times. Corporate income tax credits and sales tax refunds are the most popular programs; agricultural concerns are the top recipients.