Arizona Celebrates Economic Outlook in Rich States, Poor States
Along with ALEC CEO Lisa B. Nelson, the Center for State Fiscal Reform hosted a celebratory event in Phoenix, Arizona, earlier this week. For the second year in a row, the state of Arizona maintained its top-five status in terms of economic outlook in Rich States, Poor States: ALEC-Laffer Economic Competitiveness Index. Governor Doug Ducey and Dr. Arthur Laffer were the keynote speakers, Senator Debbie Lesko served as the state legislative host and more than forty stakeholders were in attendance.
As we noted last summer, economic growth in Arizona continues to flourish due to recently enacted pro-growth fiscal reforms. The tax burden on citizens was reduced, the public pension system was overhauled and the sharing economy was unshackled. We applaud Governor Ducey and the Arizona Legislature for making these necessary policy changes. During his time in the private sector, Governor Ducey served as CEO of Cold Stone Creamery where he oversaw remarkable growth of the company. It is unsurprising, albeit refreshing, that he brought this same entrepreneurial mindset with a focus on the bottom line to state government.
Economic competitiveness highlights in Arizona include the state’s right-to-work status, low overall tax burden, lack of estate or inheritance tax and its business-friendly environment. Governor Ducey lauded ALEC’s mission during his speech, agreeing “our government should be limited, accountable, effective and efficient.” He noted the importance of an organization that enables leaders and policymakers to share best practices and learn from the lessons of other states. Governor Ducey also articulated the crux of the research behind Rich States, Poor States:
When it comes to economics, states compete. In the game between states, people vote with their feet and ALEC recognizes this.
Known as the “godfather of supply-side economics,” Dr. Art Laffer echoed many of Governor Ducey’s remarks. Dr. Laffer reminded legislators the tax rate should be as low as possible and applied to a broad base. In determining the overall level of taxation, Dr. Laffer asserted every dollar of revenue extracted from the economy harms output. This harm must be weighed against the value added by the government using these funds. When the marginal value created by a dollar of tax revenue just barely exceeds the damage inflicted by the tax, taxes should go no higher.
ALEC is grateful for the opportunity to host this event with Governor Ducey and Dr. Art Laffer. It successfully brought Arizona stakeholders and lawmakers together to discuss the merits of limited government, free markets and federalism.