State of the States 2017

by Jonathan Williams, Joel Griffith, Elliot Young & Christine Smith

Introduction

In 2017, 50 governors across America delivered State of the State or other policy addresses. These speeches included numerous economic policy proposals that will affect the states’ economic competitiveness. This report observes and analyzes the economic policy proposals discussed in each governor’s State of the State address.

A number of different trends and priorities regarding economic policy were apparent after a full review of these addresses. Following a similar trend observed in the majority of 2016 State of the State addresses, many governors focused a considerable portion of their addresses on the issue of tax relief. Aside from tax proposals, governors discussed a number of different policy topics which, while less directly related, can still significantly affect state economies. Some of the most important of these issues included pension reform, expanding or shrinking Medicaid, changes to the state’s minimum wage and government efficiency.

Overall, most governors conveyed an understanding that lower tax rates and limited government give citizens and businesses a greater incentive to reside and operate in their states relative to others with higher tax rates and more regulations. This concept is further explored in the Center for State Fiscal Reform publication Rich States, Poor States: ALEC-Laffer State Economic Competitiveness Index, in which years of economic data and empirical evidence from each state are examined in order to determine what economic policies lead to prosperity. Generally, states with lower tax rates, fewer regulations and responsible spending habits outperform other states in terms of economic growth. Based on the observations made in reviewing the 2017 State of the State addresses, many governors are following these policies to help their states better compete for residents, jobs and capital.