Rhode Island’s beauty, superb location, coastline and institutions of higher education should make it a magnet for well-educated people and shrewd entrepreneurs. Yet, U.S. Census estimates say, its population has declined for the last four years — and, last year, declined more than that of any state, beating even Michigan, battered by the decline of the U.S. auto business.

Maybe one of the most crowded states could use a little more breathing space. But what is alarming is who seems to be leaving: It appears to be the state’s working-age (and heavily taxpaying) population, including highly educated residents who are looking for work. Unfortunately, as mounting state and local budget deficits show, Rhode Island cannot function at its best unless it has a vigorous economy, with jobs to keep young, ambitious and educated people, and tax revenues to pay for its government programs.

Rhode Island, of course, is not alone. The rest of the Northeast, and the Rustbelt, are in much the same boat, as Americans flee to the dynamic job markets of the South, Southwest and Northwest. The fastest-growing states included Nevada, Arizona, Utah and Idaho.

Even in the Northeast, though, Rhode Island is in an especially uncompetitive position. As URI economist Leonard Lardaro notes, manufacturing lost 1,800 jobs statewide in 2007, and Rhode Island’s unemployment rate outpaced the national average. “Punitive” taxes are discouraging highly paid, highly skilled workers from moving to the Ocean State, and high-tech companies from expanding, he contends. Indeed, Massachusetts seems like a veritable tax haven compared with Rhode Island.

That is a foolish and short-sighted approach by the Ocean State. The state is so small — a short drive, or walk, away from its neighbors — that people can easily avoid it and do business in Connecticut, Massachusetts or other Northeastern places, if they choose. Thus, Rhode Island’s state leaders must make sure that, at the very least, its taxes are not more punitive than its neighbors’.

Furthermore, the state’s leaders must stop letting NIMBYs (Not In My Backyard) dictate economic policy, such as blocking a thriving port at Quonset Point, slowing or stopping the expansion of the runaway at T.F. Green Airport, and preventing better energy delivery to New England, thus increasing the cost of doing business here.

The continued flight of a valuable educated workforce from Rhode Island demonstrates a number of things, some of them beyond the influence of politicians. But the failure of both Governor Carcieri (a foe of the port) and the General Assembly to create a more inviting business climate in Rhode Island has not helped. They should not keep on dragging their feet until someone has to say: “The last one out, please turn off the lights.”