Jobs & Opportunity Index (JOI), August 2016: State and Local Taxes Drag RI Back to 48

With the release of new state and local taxation data from the U.S. Census, Rhode Island fell back to 48th for the August Jobs & Opportunity Index (JOI). The Ocean State’s second-quarter increase in taxes over the first quarter compared with New York’s decrease made the difference, leading Rhode Island to lose ground against the U.S. and New England averages. In all, six of 13 datapoints are new the August report.

In Rhode Island, employment was up 1,275 from the previously recorded number, labor force up 1,770, and RI-based jobs down 100. (Note that these are calculated with pre-revision data for the prior month.) Medicaid enrollment increased by 1,243, while SNAP decreased by 711. As mentioned above, second-quarter state and local taxes were up $179 million from the prior quarter.

The biggest shift in the first chart, showing the six New England states in the national race, is Vermont’s big fall to fifth in the region (from 19th to 44th in the nation), above only Rhode Island. The reason is a large increase in Vermont’s state and local taxes, which were up by a factor of three, suggesting an issue of timing that might reverse for the next quarter. Although not as dramatic, New Hampshire has seen similar fluctuations, and returned to 1st in the nation, from 3rd last month. Thanks to Vermont, Connecticut is now third in New England, which is 33rd in the country (up three slots). Maine slipped a bit, to 20th in the nation, from 17th, while Massachusetts gained two spots, hitting 35th.

The second chart shows the gap between Rhode Island and New England as well as the United States, which expanded this month. By contrast, Rhode Island’s gap shrunk on the unemployment rate (third chart).

Results for the three underlying JOI factors were:

• Job Outlook Factor (measuring optimism that adequate work is available): RI moved forward two slots to 36th place.
• Freedom Factor (measuring the level of work against reliance on welfare programs): RI remained at 39th.
• Prosperity Factor (measuring the financial motivation of income versus taxes): RI moved up two spaces to 44th.