PROVIDENCE, R.I. (WPRI) – Rhode Island has posted yet another painfully poor showing in a national survey of local business climates.
Rhode Island came in dead last – 38th out of 38 states examined – in a survey of 12,000 small business owners published this month by Thumbtack, the San Francisco-based online services provider, and the Kauffman Foundation, a Kansas City-based nonprofit that studies entrepreneurship.
Rhode Island was one of three states that got an “F” rating in the annual survey, along with California and Illinois. But Thumbtack chief economist Jon Lieber told WPRI.com Rhode Island ranked even lower than California and Illinois, putting it in last place.
“Rhode Island’s small businesses have again rated it as the least friendly state in the nation,” Lieber said in a statement. “Creating a business climate that is welcoming to small, dynamic businesses is more important than ever, and Rhode Island continues to fail its small businesses in this regard.”
Rhode Island’s neighbors didn’t do much better: Massachusetts got a “D+” and Connecticut got a “D” overall. The best-rated states were Utah, Idaho, Texas, Virginia and Louisiana.
Rhode Island got an “F” in all but two of 11 subcategories Thumbtack/Kauffman asked about: ease of starting a business; ease of hiring; overall regulations; health and safety; environment, labor and hiring; tax code; licensing rank; and zoning. The state got a “D+” for environmental rules and a “C-” for training and networking, its best showing.
According to Thumbtack, Rhode Island had the highest percentage of small businesses who agreed with the statement “I pay an unfairly high level of taxes.” There was some nuance, however, in the comments from survey respondents that were highlighted by Thumbtack and Kauffman.
“The state doesn’t hinder small businesses with too many rules or regulations, but it doesn’t do very much to make life easy if you are already established,” a designer from Warren said in the survey. “If you want to bring your company to Rhode Island, they will bend over backwards to tempt you with tax credits and loan guarantees. There’s not so much if you are already here.”
“The only issue I have noted that closes small and large businesses or drives them out of RI is ridiculously high taxes,” said a photographer from North Scituate. Two others, though, praised free seminars offered by the state to help businesses.
The city of Providence also received an “F” from small businesses in Thumbtack/Kauffman’s survey of major American cities, getting a “D+” or worse from survey respondents in nine of the 11 subcategories. Among the dozens of cities surveyed, only Sacramento got a worse score than Providence.
A separate study released this month by Kauffman suggested states and cities looking to improve their economies should avoid tax incentives and instead focus on four steps: re-examining professional and occupational licensing; welcoming immigrants; cultivating human capital; and connecting entrepreneurs with resources.