Friday Financial Five – March 6, 2015

Friday, March 06, 2015

 

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State universities face budget cuts and higher tuitions

Bloomberg has a report on states opting to reduce funding for their universities due to budget shortfalls. For example, Arizona has cut almost half of what they spend per student since the recession of 2008, and forty eight of the fifty states have decreased spending. Only Alaska and North Dakota have increased spending, with North Dakota, the beneficiary of the booming energy economy, upping funding by almost forty percent.

Business tax filing deadline approaches

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March 16th (as the 15th is a Sunday) is the deadline for filing corporate tax returns without extension, and there are several areas that can present problems. Expenses should be well documented and capital expenditures should be properly classified. Owners need to ensure that deductions are handled properly, including the deduction of health insurance premiums versus the medical out-of-pocket hurdle for standard employees. For those seeking an automatic six month extension, Form 7004 is necessary for those with matching fiscal and calendar years.

Household income from Sentier Research

It’s generally accepted that an improvement  in the income inequality gap would propel economic recovery and growth. Sentier Research’s latest data details median household income as of January 2015. The report cites an increase in median income of $321 since December of last year, mainly from the decrease in energy costs. The group has created an index using income from January 2000 as the baseline of 100. The most recent index reading is 96.1, indicating that income is 3.9 percent lower than fifteen years ago but rising.

Quantitative Easing in Europe

While the United States ended their bond buying program last year, the European Central Bank recently provided details on a trillion dollar bond buying program starting next week. Several of the member country economies are hurting, leading to proactive measures. The ECB does project that GDP is growing ahead of estimates, while inflation for the year was revised downward to be flat due to decreased energy prices. The buying program will begin March 9th. 

The Forbes list of billionaires

Forbes (no relation) has compiled the 2015 list of billionaires. With a net worth of over $79 billion, Bill Gates tops the list of over 1,800 billionaires worldwide. There are 290 new billionaires added to last year’s total, with the youngest being Evan Spiegel, CEO of Snapchat, who is only 24 years old. The wealthiest woman on the list is Christy Walton of Walmart, amassing nearly $42 billion.

Dan Forbes is a regular contributor on financial issues. He is a CFP Board Ambassador. He leads the firm Forbes Financial Planning, Inc in East Greenwich, RI and can be reached at [email protected]

 

Related Slideshow: RI Business Rankings in US

See how Rhode Island stacked up.

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WalletHub

Rhode Island has 2015's eighth highest insurance premium penalties for high risk drivers, according to a WalletHub report. 

Rhode Island ranks fifth overall in the category of speeding over 20 mph annual premium increase at $482. While ranking third overall  in the category of 2 accidents annual premium increase at $2,721.

Rhode Island ranks ninth overall under the reckless driving annual premium increase at $749. 

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WalletHub

Rhode Island has been ranked as the 8th most eco-friendly state in the country, according to a recent study by WalletHub.

Rhode Island ranks third in environmental quality and 16th in Eco-Friendly Behaviors Ran landing them in 8th overall.

RI is behind Washington and New Hampshire who are in the six and seven spots respectively, and in front of Connecticut and Hawaii who come in at the nine and ten spot. 

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WalletHub

Rhode Island is 2015's 4th Worst State to be a taxpayer, according to a recent WalletHub report. 

Rhode Island ranks 48th of 51 with an average state and local tax price of $7,159 which is good for a 27% difference from the national average. 

The states that are directly behind Rhode Island are Wisconsin at $7,159, Nebraska at $7,298 and Illinois at $7,719 for a 37% difference from the national average.

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WalletHub

Rhode Island has the highest vehicle property taxes in the country, paying an average of $1,133 according to a report from WalletHub.

Virginia and Kansas are the two states just ahead of Rhode Island in the 49 and 50 spots, paying $962 and $905 respectively. 

RI also ranks 42nd in average real estate tax, paying an average of $2,779, according to the WalletHub report.

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WalletHub

WalletHub has ranked Rhode Island as the 7th worst state to be rich in in a recent in depth analysis of 2015's Best States to be Rich or Poor From a Tax Perspective

On a scale with 1 being the best, and 25 being average, Rhode Island ranks 37th in low income earners, 42 in middle income earners and 45th in high income earners. 

To see the full report, click here. 

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Gallup

Providence-metro ranks at the bottom for job creation in 2014  

Rhode Island has been ranked amongst the worst in job creation, according to a recent survey done by Gallup. 

Gallup gives the Prov-metro area an index score of 23, the lowest score is the New York- New Jersey area with 20. 

Salt Lake City, Utah and Austin-round Rock, Texas rank the highest with a score of 37. 

See the rest of the rankings here. 

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Forbes

The 2014 state rankings by Forbes has just been released and Rhode Island moved up two spots from #48 in 2013 to #46 in 2014.

What does Forbes say about RI's business environment"

After Michigan and Illinois, Rhode Island has experienced the third worst net migration out of its state in the country over the past five years. With a recent unemployment rate of 7.6%—lower than only Georgia and Mississippi—residents are leaving the state in search of jobs. Rhode Island has been stuck in the bottom five overall for six straight years. One plus: labor costs are 5% below the national average, which stands out in the expensive Northeast.

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Tax Foundation

Findings from The State Business Tax Climate Index were released this morning by Tax Foundation which found Rhode Island to have the 45th best tax climate for businesses for 2015. The state's rank has not changed since last year after The Index analyzed 100 different tax variables in multiple categories. 

Read more about the report here

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WalletHub

After conducting an online suvery consisting of 1,050 individuals from both parties across the nation, WalletHub ranked Rhode Island as having America's 33rd fairest tax system.

Click here to view the poll's entire findings

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Thumbtack/Kauffman

Providence is the second worst city in America for small business, according to a new survey conducted by Thumbtack.com and the Kauffman Foundation.

More than 12,000 small businesses in 82 cities across the country participate in the survey. Providence received an overall "F" grade for small business friendliness.

Full Survey Results Here.

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The Economist

Small Business Friendliness Grade: F

The Economist grades states on an A+ to F grading scale for its small business climate.  Rhode Island is one of just 6 states to earn an "F" grade.

Overbearing bureaucracy and excessive licensing is stifling small business in America. 

Read More About The Economist Grade Here

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CNBC

CNBC ranks each state in cost of doing business, economy, technology and innovation.

Rhode Island's unemployment rate as of May 2014 was 8.2 percent. This is RI's lowest unemployment rate since August 2008.

Read More About CNBC Ranking Here

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Forbes

Forbes ranks each state in business costs, economic climate, and growth prospects. RI is third worst in 2013.

The most damning in the commentary:

After Michigan, Rhode Island has experienced the second worst net migration in the country over the past five years.

Read More About Forbes Ranking Here

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ChiefExecutive.net

#39 ChiefExecutive.net

ChiefExecutive.net ranks each state in taxations and regulations, workforce quality, and living environment.

The most damning in the commentary:

Sky-high unemployment rate bespeaks continuing terrible business climate.

Read More About ChiefExecutive.net Ranking Here

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Tax Foundation

#46 Tax Foundation

Tax Foundation ranks each state in corporate tax rank, sales tax rank, and unemployment insurance tax rank.

Rhode Island and the other states in the bottom ten suffer from the same afflictions: complex, non-neutral taxes with comparatively high rates.

Read More About Tax Foundation Ranking Here

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Wallet Hub

#24 Wallet Hub

Wallet Hub ranks each state in ROI rank, state tax rank, and overall government services.

Rhode Island ranked #50 for worst roads and bridges, but ranked #4 in safety.

Read More About Wallet Hub Ranking Here

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ALEC

#47 ALEC

ALEC ranks each state in economic performance and outlook.

Although Rhode Island ranked low in economic performance, a forward-looking forecast is based on the state’s standing in 15 important state policy variables. Some of these variables include top marginal personal income tax rate and sales tax burden.

Read More About ALEC Ranking Here

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Kauffman Foundation

#50 Kauffman Foundation

Kauffman Foundation ranks each state in entrepreneurship.

Entrepreneurial activity generally is highest in Western and Southern states
and lowest in Midwestern and Northeastern states.

Read More About Kauffman Ranking Here

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Free Enterprise

#47 Free Enterprise

Free Enterprise ranks each state in performance, exports, innovation + entrepreneurship, business climate, talent pipeline, infrastructure.

Rhode Island has continued to feel the direct impact and ripples from the recent recession—it ranks 47th overall in economic performance. However, positive rankings of 15th in talent pipeline and 16th in innovation and entrepreneurship suggest the existence of a foundation on which to build the future.

Read More About Free Enterprise Ranking Here

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The Pew Charitable Trusts

#40 The Pew Charitable Trusts

The Pew Charitable Trusts ranks each state in job growth and job creation.

Rhode Island added 6,223 jobs in 2014.

Read More About The Pew Charitable Trusts Ranking Here

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Gallup

10th Worst in Gallup's Annual Ranking of State Job Markets 2014

Rhode Island has been ranked 10th worst for job creation in Gallup's annual ranking of state job markets in 2014 with a job creation index number of 21

Rhode Island is one of two (Connecticut) states to rank in the bottom ten each year since 2008.

The 2014 State level findings have were drawn from 201,254 interviews with employed adults across the nation. 

See the full list of rankings here. 

 
 

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