State Competitiveness

“Tax burdens. Unemployment insurance costs. Population shifts. Educational performance. How does our state compare with the rest of the country on these and dozens of other standards?” This is the introduction to the 2005 Competitiveness Redbook, put out by The Washington Alliance for a Competitive Economy. I picked up their book at my talk in Ellensburg, WA and found its analysis extremely interesting. You can check it out yourself at www.awb.org.

WA did well in Non-Ag Employment Growth (14th among the 50 states); Per Capita Income (13); Exports/Capita (1!); Local Internet Access (2); Cost of Doing Business (8); Wages & Output of Production (2); High Tech Employment (15); High Tech Wages (1); Educational Attainment (10); Venture Capital Investments (5); and R & D per Capita (4).

Some that WA didn’t fare as well on were: Cost of Doing Business (8th worst); State & Local Taxes (12); Unemployment Insurance Taxes (1); Unemployment Insurance Payments (6); Workers Compensation Benefits Paid (4); and Home Ownership Rates (7).

Two calculations that caught my eye were the effective property tax rate for commercial and industrial buildings in the state’s largest city. On a $25 million commercial building Illinois had the highest tax at $1,687,863, while Wyoming had the lowest at $216,600. For an industrial building Connecticut’s tax was $1,669,200 (IL was 2nd at $1,599,028) while Hawaii was lowest at $235,220 for a $25 million building. When are some of these states going to learn that you can’t tax your way to prosperity, especially placing increasing taxes upon those that are generating the jobs in a state?

Competitiveness among states has been important for sometime. Competitiveness with other countries is increasingly going to become even more important in the future.