This story was posted Wednesday in Forbes. See it here.
For the third straight year Maine ranks No. 50 in Forbes seventh annual Best States for Business. Maine’s problems run deep. It has the second highest corporate tax burden at 16% above the national average, according to Moody’s Analytics. Energy costs, like the rest of New England, are also sky high at 27% above the U.S. average. The state is burdened with the oldest population in the U.S. with a media age of 42.
The numbers tell the story on Maine. Its economy contracted 0.6% a year between 2006 and 2011, versus 0.5% annual growth (net of inflation) for the U.S. as a whole. The five-year projected growth rate of 2.5% is fifth worst in the U.S. The job growth picture is equally anemic, as its 1.4% forecasted rate through 2016 ranks fourth worst among states.
Maine has few big businesses headquartered there, including none of the 1,000 largest U.S. companies by sales. The businesses that are located there are not very efficient. Gross state product per employee is a proxy for the productivity of a state and Maine’s $87,000 of economic activity per employee beats only West Virginia and Montana. A bigger issue is that productivity has barely improved the past five years. The 0.2% growth in GSP per employee is the worst in the U.S.
Rhode Island ranks No. 49 this year, down one spot from 2011. Rhode Island has experienced the second worst net migration, after Michigan, over the past five years. Residents are leaving in search of jobs, as the recent unemployment rate of 10.4% is the second highest in the U.S. after Nevada.
Another drawback is a lousy regulatory climate. “Rhode Island has one of the worst records on labor market freedom and health insurance regulations,” says William Ruger, who co-authored the Mercatus Center’s Freedom in the 50 States study, which we incorporated into our state ranking. Rhode Island had the fifth worst regulatory environment in the Mercatus study, which looks at labor regulations, health-insurance coverage mandates, occupational licensing, the tort system, right-to-work laws and more.
Rhode Island took a public beating this year when former Boston Red Sox pitching legend Curt Schilling laid off the 300 Rhode Island employees of his video game company, 38 Studios, and the company filed for bankruptcy. Rhode Island’s economic development agency provided Schilling’s company with a $75 million loan guarantee to entice 38 Studios to move to Rhode Island from Massachusetts two years earlier. The loan was made with the idea of Rhode Island reaping jobs and tax income from the move. The economic development agency sued Schilling and several of its former members last month, but it is not expected to recoup much of the loan.
Our states ranking is based on six factors: business costs, labor supply, regulatory environment, current economic climate, growth prospects and quality of life. The study incorporates 35 data points with business costs weighted the most heavily. Moody’s Analytics provided much of the economic data. A common theme runs through the bottom 10 states as No. 46 Mississippi is the only one that is a right-to-work state (click here for a detailed methodology).
California cracks our bottom 10 at No. 41. California’s $2 trillion economy is bigger than all but eight countries around the globe. The state represents 13% of the U.S. economy. Yet, some companies have given up on the Golden State.Comcast shut down its Northern California call centers this year, which cost 1,000 people their jobs. The company cited, “the high cost of doing business in California.” Campbell Soup is shutting down its Sacramento factory—eliminating 700 jobs—and moving production to Texas, Ohio and North Carolina. Forbes’ top ranked state Utah, has nabbed recent expansions by California companies, including Adobe Systems, Ebay and Electronic Arts.
California is littered with problems. It ranks last in Pollina Corporate Real Estate’s study of the states with the best financial incentive programs and state economic development efforts. Its A1 bond rating from Moody’s on general obligation debt is the second lowest of any state—only Illinois is worse. The regulatory environment is fourth worst per the Mercatus report. The recent unemployment rate of 10.1% is the third highest in the nation. In addition to a heavy tax burden, energy costs are 33% above the national average.
Yet for all of its issues, the outlook is relatively bright in California. The economy is projected to expand 3.6% annually over the next five years—ninth best among states. Forecasted job growth of 2% ranks in the top third. While many companies and individuals flee California, others are drawn in by the concentration of highly educated workers and by the fact that California is home to 10% of the 1,000 largest U.S. public and private companies. Another plus is the $36 billion in venture capital money invested in California companies the past three years, which is four times the total of any other state. And of course, there is always the weather.
Governor LePage Issues Statement on Forbes’ Ranking of Maine as ‘Worst State for Business’
AUGUSTA – Governor Paul R. LePage reacted to today’s release by Forbes of its annual ranking of Best States for Business. For the third year in a row, Maine ranked in last place, making it the Worst State for Business, according to Forbes.
“I am disappointed, but not surprised,” said Governor LePage. “We will continue to be on the bottom of the barrel until we make structural changes. During the past two years, I have advocated over and over again for changes that will improve Maine’s economy. We’ve got to get serious about lowering energy costs, improving education and paying our bills. These are the areas we need to focus on to better the lives and opportunities of all Mainers.”
Despite Maine’s ranking as 50 overall, the state showed improvement in lowering business cost, rising from 44th in 2011 to 40th in 2012.
The article cited specific challenges facing the state, including having the highest corporate tax burden—16 percent above the national average, energy costs 27 percent higher than the national average, and the oldest population in the United States.
“Without enacting bold changes, if Puerto Rico becomes a state, next year Maine’s ranking will drop to 51st ,” the Governor quipped, referring to Puerto Rico’s recent resolution in favor of statehood.
So got an anchor tied to your ass?
Leave. Adios. Auf wiedersehen. Don’t let the door hit ya where the Good Lord split ya….. We can’t change our latitude and this is one ol’ fuggah who ain’t pullin’ up stakes.
Only some of the reasons I bailed out of Maine last July. I’m in Fort Worth, Texas. Where there are jobs, low housing costs, low gas prices, no state income tax and no snow.
The Governor left out regulation as a cause. Something has to be done about medium, small, and micro businesses being regulated by national and international regulatory standards. I sit here not paying taxes and unemployed because of those regulation standards. It is just a question of time before I go under, literally.
Boy, what an attitude!
You can stay and pay all the bills then I guess.
Cornelius Donovan – Major reason being that the Feds shut down your employment here in Maine??? There are reasons Texas is cheaper – they soon become self-evident.
More reasons why I only go back to visit.
The Governor left out regulation as a cause. Something has to be done about medium, small, and micro businesses being regulated by national and international corporate regulatory standards, which creates a kind of monopoly for the large corporations. I sit here not paying taxes and unemployed because of those regulation standards. It is just a question of time before I go under, literally.
You are spot on… Alan. In addition to what you correctly articulate, you may see my constant references to our Congress being “Bought” by the big money changers and corps. They control the Congress and the legislation, especially over the past 25 years. There is a huge difference between the large corps and small businesses and how regulations affect them. The large corporations are literally devouring the small businesses that they feel are going to grow and make them stronger, and the small businesses that independent businessmen/women choose to run at their own individual and independent levels are being squeezed and choked out because they can’t compete. I hear you, and this needs to be addressed at all levels of government. For example, my Cause, STudent Debt Crisis.org, is now petitioning the U.S. Congress to “stop accepting money from Sallae Mae” who we consider a corrupt lending Corp. that is Lobbying Congress to keep the squeeze on student loan interest rates for students. These Oligarchs are everywhere, Alan, and we need to get the money out of affecting the Voice of We The People. We got over 10,000 thousand signatures, yesterday, alone….. and that is what it is going to take to pressure change at the legislative levels. The Corp. money is that great and buying our legislators. I am hopeful that men like Angus King, won’t bite the bait. I urge everyone to continue to e-mail Senator Elect King and remind him, (as I politely did) to keep a nonpartisan attitude and do what is in line with the Constitution. Alan, it will forever boggle my mind– why justice and fairness and the theme inherent in the Constitution of maintaining this justice and fairness– is not grasped by so many Americans. I so wanted to start my own business here in Maine, however, the regulations are just too costly and inhibit my ability to do so. Also, some small businesses who have a lot of personal wealth backing them are simply trying to sell out to the big guys. Warren Buffet is a good example of a guy who has so much money he buys up smaller, lucrative businesses. The current rules benefit the extremely wealthy conglomerates… and that hurts the majority of small businesses. Until Americans stop pitting themselves against each other and are willing to look at the reality of justice and fairness… and it’s affect on this economy… we are a sinking ship.
Boy does this article tell the truth. Some 12 years ago now I was taken in by Maine’s natural charm, it’s scenery, it’s villages, and it’s people. And was I Taken! Been spending the last 5 years trying to liquidate without losing a bundle. Maine could have so much to offer. Instead, they have blown it big time. A perfect study why Liberalism just doesn’t work.
Glen Thompson – Actually, Glen – you blew it. Failed to do the requisite research before locating here. Liberalism is fine – most likely piss-poor planning on your part and failure to adapt rendered you incapable of succeeding.
Ron, Theron lies the reason Maine is headed down the financial toilet. The liberals in this state are unwilling to make the necessary changes to keep and attract business. Without business no jobs. Without jobs… No tax revenue. Without tax revenue no more spending. Maybe liberals are for cutting spending after all… Problem is that we will all have to be broke or move before it happens.
Shawn – I have a ‘Business’ – Perhaps with a bit of reading comprehension you might have picked up on that. Thank God for the internet; Americans don’t have the appreciation and appetite for fine and rare books that others around the world do
Welfare states attract and host the least productive of parasites.
Of course a double-pensioner from Illinois like Ron Riml thinks liberalism is fine. His solution—for everyone who disagrees with him to leave—is what has Maine circling the drain.
But that’s how the liberal haters operate: ignore the plain facts, make nasty remarks about people engaging in debate, belittle those in the private sector and cop an ugly attitude when you question them.
Stow the personal attacks, Senior Chief, or we’ll lock you in the Facebook brig where no one can hear your rants.
You’ve kicked me out before as I’ve shown so called ‘Conservatives’ up by being those who’ve run away from military duty and cared only about the almighty $$$. So many “Conservatives in Name Only”
Are you suggesting we do away with Military and Police Pensions as you criticize those who EARN them…..
That certainly tends to reveal where your true colors and allegiance lies – and it’s not with those who sacrifice much to protect you. Smedley Butler may have been on to something.
I’ll save the ‘Print Screen’ of this before you vaporize me to memorialize Maine Wire’s ‘Big Brother’ Tactic….
It’s funny, Ron is throwing accusations around, and making assumptions…I did ten years active duty Navy, another ten years as a reservist. And am a retired reservist. I worked for twenty years in electronics manufacturing in Maine, before all those jobs dried up and blew away. Then I corrected course, went back to college, on my own dime, graduated in 2008, planning on becoming a teacher. Well, all those jobs dried up and blew away. I tried to get a teaching gig for three years, all the while doing what part time employment I could find, which weren’t much. So yeah, you could say I bailed on Maine, but I think it was more that Maine bailed on me. So yeah, I’m down in Texas now. I’m still getting some of my hoops jumped through to get fully certified to teach down here,but you know something, they’re actually hiring teachers down here. And in the Dallas Fort Worth area, first year teachers are starting out in the $40k range on average, some school districts pay considerably more. So Ron, you and the rest of your double dipping retirees can go ahead talking about the way life should be, I’ll be down here actually doing it, cause those of us who actually have to work to earn a living sure as HELL, can’t do it there…
Cornelius Donovan – “Double-Dipping” – occurs when one retires from a job, then returns to collect a salary from it as they also collect a pension from the same job.
Sorry Lad – I collect my two pensions from two completely separate careers from two separate entities – neither of them in Maine. You couldn’t figure that out??? Perhaps that’s why you’re having a difficult time of it.
Cornelius Donovan – Texas doesn’t spend much more per/capita on education than Maine does: $2,641.50 vice $2,633.20, FY2013 – Texas isn’t getting quite the result Maine is, either. HS students there are scoring below average on the Science and Engineering Readiness Index, while Maine HS students score above average. – http://www.aip.org/press_release/state_outcomes_math_science_education_reveal_big_disparities.html
OMG, I am from Maine too, was just looking at something a friend here sent me about Maine being bad for business. Now live in SC, SO much cheaper to live here!
Em Dalrymple – Sure, Live in South Carolina, where the ‘Violent Crime Rate’ is almost four times higher – per capita – than it is in Maine. No Thank You!!!
FBI Uniform Crime Reports, 2011; Maine 123.2 per 100,000 population; South Carolina 571.9 per 100,000 population.