By David Flemming
Depending on what study you choose to look at, Vermont’s business climate is either slightly below average or quite close to last in the US. Just a few days ago, CNBC gave Vermont a #31 ranking. While this rank is a little below average, it is far above where the Tax Foundation placed Vermont just last December: #43. So did Vermont’s Legislature somehow manage to pass enough business legislation between December and July that we changed so many spots? While there was some legislation passed, the immediate answer is “no.”
The best explanation is that the studies chose to measure different things, with some overlap.
According to CNBC, “To rank America’s Top States for Business in 2022, CNBC scored all 50 states on 88 metrics in 10 broad categories of competitiveness. Each category is weighted based on how frequently states use them as a selling point in economic development marketing materials. That way, our study ranks the states based on the attributes they use to sell themselves…Under our methodology, states can earn a maximum of 2,500 points.”
On the other hand, the Tax Foundation’s State Business Tax Climate Index aims to “enable business leaders, government policymakers, and taxpayers to gauge how their states’ tax systems compare.
While there are many ways to show how much is collected in taxes by state governments, the Index is designed to show how well states structure their tax systems and provides a road map for improvement.”
For CNBC’s ranking, Vermont did better than average on (ranked from highest weighed to lowest weighed) ‘Infrastructure,’ ‘Life, Health & Inclusion,’ ‘Business Friendliness’ and ‘Education.’ We were worse than average on ‘Workforce’ (last place at 50), ‘Cost of Doing Business’ ‘Economy,’ Technology and Innovation,’ ‘Access to Capital’ and ‘Cost of Living.’
For the Tax Foundation’s ranking, we came in better than average on ‘Sales Tax’ and “Unemployment Insurance Tax’ while we were worse than average on Corporate Income Tax, Individual Income Tax and Property Tax.
While it does make some sense that CNBC “ranks the states based on the attributes they use to sell themselves,” One has to wonder how states choose sales pitches — are they trying to get more businesses to start in state or change headquarters, or are they trying to sell themselves to voters who happen to like their policies?
It is unclear from CNBC’s methodology how whether they consider some impact to be negative or positive factors. They mention ‘right to work laws’ for the Workforce category. But some states might proudly advertise having them and some states might advertise not having them. A value judgement must be made which impacts a state’s score.
‘The availability of renewable energy’ in the Infrastructure category, ‘inclusiveness in state laws… voting rights… public health spending (the more, the better?)’ in the Life, Health & Inclusion category and the number of ‘historically Black colleges and universities’ in the Education category are all politically correct issues that I doubt many businesses would prioritize as highly as the tax climate.
It seems likely that CNBC weights Business Friendliness a bit lightly at just 8% of the total, compared to 13% for Life, Health & Inclusion. “Companies follow the path of least resistance. That includes a legal and regulatory framework that does not overburden business. We measure each state’s lawsuit and liability climates, regulatory regimes covering areas such as trade and labor, as well as overall bureaucracy.” Having heard countless stories of Vermont businesses caught in Vermont’s bureaucracy and deciding to leave the state or close down, a heavier weighting would have been better.
CNBC’S 2022 TOP STATES FOR BUSINESS
|Workforce (16% weight)||24||50||22||14||43||39|
|Infra-structure (15% weight)||31||22||47||39||49||44|
|Cost of Doing Business (14% weight)||49||39||32||45||40||47|
|Economy (13% weight)||26||33||29||47||32||41|
|Life, Health & Inclusion (13% weight)||13||1||15||17||2||16|
|Technology & Innovation (10% weight)||10||37||39||25||44||33|
|Business Friendliness (8% weight)||21||14||8||11||19||36|
|Education (7% weight)||1||8||6||8||23||29|
TAX FOUNDATION’S 2022 STATE BUSINESS TAX CLIMATE INDEX RANKS
|Individual Income Tax Rank (31% weight)||9||23||11||31||40||47|
|Sales Tax Rank (24% weight)||1||8||12||24||16||23|
|Corporate Tax Rank (21% weight)||41||35||36||37||43||27|
|Property Tax Rank (14% weight)||46||41||45||42||49||50|
|Unemployment Insurance Tax Rank (10% weight)||44||35||50||49||15||22|
David Flemming is a policy analyst for the Ethan Allen Institute. Reprinted with permission from the Ethan Allen Institute Blog.
3 thoughts on “Flemming: Vermont’s business climate is either below average or close to last”
So the plan for Vermont has been highly successful- in other words.
They want a government dependent state and apparently that is just what it is.
The only “businesses” growing in Vermont are the public unions, state and town administrators who always get incomes well above the taxpayers and there is no end in sight.
What large company would want to be in VT to create jobs & income? You have a Progressive/ Socialist legislature…who on one hand hate you, and on the other want to take as much out of you as they can in taxes. IBM was so disgusted with VT that they PAID Gobal Foundries $1 BILLION to take IBM Essex off their hands!. Imagine that. Why was IBM ao angry? One reason was that the CONSERVATION LAW FOUNDATION (CLF) fought & spit on IBM for 15 years. IBM always stated they needed the Circ Highway to the Essex campus.. They got ALL approvals from the State and it was fully funded…that is until THE NON ELECTED CLF decided they hated the Circ Highway & IBM….and for 15 years the CLF fought & delayed it with LAWFARE tactics that ALL failed in court, but they just appeal.. In the end, IBM gave up and they left VT in disgust. The CONSERVATION LAW FOUNDATION did the SAME thing to Stowe Ski area. Stowe needed to have slope slide hotel & condos, as many competing resorts had. They wanted the PARKING LOT at Little Spruce for it. But the CLF HATED Stowe…(it was owned by insurance giant (evil) AIG). The CLF tied up Stowe for FOUR YEARS in court with losing LAWFARE tactics…because they said the parking lot was a “Bear Habitat!. Stowe had ALL State permits IN HAND, but once again…..the CLF stymied all – because they CAN – and they still do. The CLF has also been leading the LAWFARE lawsuits to STOP any pipelines of needed clean natural gas for VT.
When the obituary on VT, and it’s failure, is written, a whole chapter needs to be dedicated to the damages of the militant activism – lead by the Conservation Law Foundation and Nature Conservancy.
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