American Legislative Exchange Council Releases New Rich States, Poor States Report

New Report Reveals Lower Taxes, Limited Government Key to State Economic Success

States Ranked Based on 15 Economic Policies; Utah Takes Top Rank for Best Economic Outlook in 2013

Illinois, New York and Vermont rank last

Washington, D.C. (May 23, 2013)—Utah holds the top spot for states with the best economic outlook in 2013, followed by North Dakota, South Dakota, Wyoming and Virginia, according to a new report released by the American Legislative Exchange Council.

“Utah’s economic policies have remained strong, and because of their firm commitment to economic growth and competitiveness, they’ve ranked first in all six editions of our report,” said Jonathan Williams, director of the American Legislative Exchange Council’s Center for State Fiscal Reform and co-author of Rich States, Poor States: ALEC-Laffer State Economic State Competitiveness Index.

Rich States, Poor States examines the latest trends in state economic growth. The data ranks the 2013 economic outlook of states using 15 equally weighted policy variables, including various tax rates, regulatory burdens and labor policies. The sixth edition focuses on the growing momentum in state capitals for fundamental pro-growth tax and pension reform. Rich States, Poor States also features a case study on California’s fiscal health and outlines how California lawmakers can restore economic prosperity.

Rich States, Poor States clearly demonstrates limited regulation, low taxes, low debt and balanced budgets create the best environment for business, investment, and jobs,” said Utah State Senate President Wayne Niederhauser (SD-9).

Nationally, states with low tax rates, limited government regulations and right-to-work laws were most likely to have a better economic outlook than states with high income taxes and burdensome regulations. The report shows that over a ten-year period, the nine states without personal income taxes have outperformed the nine states with the highest income tax rates in population, job and revenue growth.

Used by state lawmakers across America since 2008, Rich States, Poor States: ALEC-Laffer State Economic Competitiveness Index, is authored by economist Dr. Arthur B. Laffer, Wall Street Journal senior economics writer Stephen Moore and Jonathan Williams, director of ALEC’s Center for State Fiscal Reform.

“It is important for policymakers to have a publication that helps and encourages economic growth and competition between states to encourage prosperity,” said Sen. Rand Paul (R-KY). “Publications like this one help educate legislators and governors with the tools to understand which policies work and which policies will waste taxpayer dollars.”

The 15 economic policy variables used by the authors to rank the economic outlook of states have shown over time to be among the most influential variables for state growth. The top ten and bottom ten states for 2013 are:

Overall Economic Outlook for 2013
Top Ten Bottom Ten
1. Utah
2. North Dakota
3. South Dakota
4. Wyoming
5. Virginia
6. Arizona
7. Idaho
8. Georgia
9. Florida
10.Mississippi
41. Maine
42. Montana
43. Connecticut
44. Oregon
45. Rhode Island
46. Minnesota
47. California
48. Illinois
49. New York
50. Vermont

“Rich States, Poor States provides insight and research into what state policies are shown to be effective in creating job growth and economic stability,” said co-author and economist Dr. Arthur B. Laffer. “The report is intended to be a resource for state lawmakers, citizen groups and all those who are interested in learning how to improve the economic health of their state.”

To download a copy of Rich States, Poor States and to see individual state data, visit www.alec.org/rsps

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The American Legislative Exchange Council is the largest nonpartisan, voluntary membership organization of state legislators in the United States. The Council is governed by state legislators who comprise the Board of Directors and is advised by the Private Enterprise Advisory Council, a group of private, foundation and think tank members. For more information about the American Legislative Exchange Council, please visit: www.alec.org.  

Contact: Molly Fuhs
mfuhs@alec.org