4-15-14 – Vermont Ranks 49th in Business Competitiveness

by Shayne Spence

The 2014 edition of the American Legislative Exchange Council’s (ALEC) Rich States, Poor States has been released, and Vermont continues to fall at the bottom of the pack in business and affordability.  In the 7 year history of the study, Vermont has never managed to get above 49th, which is where we ended up this year.   By taking a look at 15 important policy variables, such as tax structure, labor policy, and the size of state government, this study predicts the economic outlook of states.  With the second most progressive income tax in the country, along with the third highest property tax burden (per $1,000 of personal income) and net outward migration of 2,848 people from 2002-2011, it is no shock that Vermont is so low in the rankings.

Some notable rankings include:

Top Marginal Personal Income Tax Rate – 8.95% – 43rd
Top Marginal Corporate Income Tax Rate – 8.50% – 36th
Recently Legislated Tax Changes (2012-2013, per $1,000 of personal income) – $1.12 – 45th
Public Employees Per 10,000 of population (Full-time equivalent) – 632.6 – 44th
State Minimum Wage – $8.73/hr – 48th
Average Workers’ Compensation Costs (per $100 of payroll) – $2.07 – 37th

Across the board, Vermont falls behind other states, as it has in these rankings since 2008.  And some of the information is dated, meaning that our ranking stands to be even lower by the time the next edition comes out.  Additional burdens on business have been added since the study was conducted, including an additional $62 million in property taxes, and an increase in the minimum wage has been passed by the House and is being considered by the Senate.  Being 48th in both of those categories already, it is safe to say that continuing further along this path is not going to make our business environment any better.

However, Rich States, Poor States provides an in depth analysis of what is working and what isn’t across the country.  While our own policies have proven to be destructive to businesses and jobs, by taking a look at states like Utah, Indiana, and Idaho.  Each of these states have low tax burdens, small state governments, and a welcoming business climate.  And all of these states have seen net gains in population during the same time period that Vermont is losing residents and taxpayers.  While it is clear that more of the same is not going to help Vermonters, we can learn from other states’ examples and turn the state around.  After all, there’s nowhere to go but up.

{ 7 comments… read them below or add one }

David Bresett April 17, 2014 at 1:01 pm

According to ALEC, a rightwing group that hates Vermonters, and they think the Democrats super majority is a great thing. They just can’t except reality.


John Cisar April 19, 2014 at 4:06 am

Baiting the ALEC as “hateful to Vermonters” is a sentiment. . Is acknowledging Vermont’s problems tantamount to “hate” these days?


John Goodrich April 19, 2014 at 12:44 pm

To this dismal trail of failed policies which burden Vermonters with high costs snd low opportunity, add the pending Shumlincare and the cost of energy in Vermont. We have a huge hole from which to dig out. We need people to change this landscape who understand job creation and free enterprise. In short, the state, with its penchant for ever more tax and control, is not the answer!


Paul Frascoia April 19, 2014 at 2:02 pm

Sadly, many of business operators, myself included, who used to lobby the Legislature actively to limit the annual damage done to our business competitiveness have now simply turned to focusing our energy on investing in our businesses outside of Vermont. The only question remaining is how many jobs leave and how fast as employers invest elsewhere and pull up stakes in VT. I have long joked that VT would become a national park eventually. I fear that joke is coming closer to reality every year It will take many years for our current policy path to sink the state but I do think we are in the gradual process of going down that path.


Valerie Mullin April 20, 2014 at 11:12 pm

The only think I disagree with is “the only place we can go is up”. Staying on our current path can make things go from worse to a financially unlivable state


Marion Clegg April 21, 2014 at 1:56 am

If we do nothing it is our own fault. Those of us that go to the polls and elect our Legislature don’t really look at the character of the person we voted for but listened to the promises they made which were never kept once elected. At one time most of our legislators were not business people but lawyers. We need people in there that understand business and have been successful. To see this happen we have to reduce the length of time spent in Montpelier so some of these men/women will run. We have allowed the present administration run a number of our businesses out of the state and many people followed. We need to have a governor that will say “no” to the federal government and listen to the people within the state. We also need to look at some of those that have come into Vermont over the past 10-20 years with their liberal ideas. We also need to go back to the overseer of the poor and let them decide who needs assistance and who doesn’t instead of the federal government that doesn’t know who to help and who to tell “find a job”. There was an article written back in 1972 titled “Taking Over Vermont” and they did exactly what they said they would do ~ through the voting system. That’s how we got our first Socialist Mayor, now our State Senator in Washington. Vermonters have got to get serious about this state and fight for it. It can be done but only if we start getting serious about how much Vermont REALLY means to us and to the future generations coming up.


Randy May 7, 2014 at 12:58 am

Vermont has several strikes against it before it starts pushing employers away: transportation difficulties, few natural resources/energy, and small homogeneous population.


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