Utah Ranks #1 in Economic Outlook...Again
Utah is currently ranked 1st in the United States for its economic outlook, according to The Rich States, Poor States: ALEC-Laffer State Economic Competitiveness Index. Utah is not new to the #1 ranking of economic outlook from past versions of this report. The Beehive state has taken the top spot in economic outlook for 16 years in a row.
The Rich States, Poor States: ALEC-Laffer State Economic Competitiveness Index is a comprehensive report published annually. Its latest report, the 16th edition, was posted on April 13, 2023. It ranks states in two areas: economic outlook and economic performance using fifteen equally weighted policy variables. It is published by the American Legislative Exchange Council Center (ALEC) for State Fiscal Reform. Generally the Index demonstrates that states that spend less, especially on income transfer programs, and states that tax less, particularly on productive activities such as working or investing, experience higher growth rates than states that tax and spend more.
Again, Utah came at #1 in the Index' Economic Outlook category for the 16th year in a row (every year the report has been published). Utah came in second in the second category, Economic Performance, after Florida which took the top spot.
North Carolina was ranked #2 in Economic Outlook. Utah's neighbors, Arizona and Idaho, were ranked #3 and #4, respectively in both categories, Economic Outlook and Economic Performance.
The report was authored by Dr. Arthur B. Laffer, Stephen Moore, and Jonathan Williams.
Dr. Laffer is founder and chairman of Laffer Associates and Laffer Investments, and is considered by many to be “The Father of Supply-Side Economics.” In March 1999, he was noted by Time magazine as one of “the Century’s Greatest Minds” for his invention of the Laffer Curve, which has been called one of “a few of the advances that powered this extraordinary century.”
Stephen Moore formerly served on The Wall Street Journal’s editorial board and wrote on the economy and public policy. In January 2014, he returned to The Heritage Foundation.
Jonathan Williams is Chief Economist and Executive Vice President of Policy at the American Legislative Exchange Council (ALEC), where he works with state policymakers, congressional leaders and members of the private sector to develop economic policy solutions for the states.
Based in Arlington, VA, the American Legislative Exchange Council calls itself 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. ALEC is dedicated to the principles of limited government, free markets and federalism. It counts nearly one-quarter of the country’s state legislators and stakeholders from across the policy spectrum, ALEC members represent more than 60 million Americans and provide jobs to more than 30 million people in the United States, according to the ALEC website.
The American Legislative Exchange Council publishers the ALEC-Laffer State Economic Competitiveness Index, which it calls "a forward-looking forecast based on a given state’s standing (equal-weighted average) in 15 state policy variables," as summarized below:
- Highest Marginal Personal Income Tax Rate This variable is measured as the difference between the average tax liability per $1,000, at incomes of $50,000 and $150,000. Utah ranks 17th.
- Highest Marginal Corporate Income Tax Rate This variable includes local taxes, if any, and includes the effect of federal deductibility, if allowed. Utah ranks 11th.
- Personal Income Tax Progressivity This variable was measured as the difference between the average tax liability per $1,000, at incomes of $50,000 and $150,000. Utah ranks 12th.
- Property Tax Burden This variable is calculated by taking tax revenues from state and local property taxes per $1,000 of personal income. Utah ranks 15th.
- Sales Tax Burden This variable is calculated by taking tax revenues from state and local sales taxes per $1,000 of personal income. Sales taxes taken into consideration include the general sales tax and specific sales taxes. Utah ranks 37th.
- Remaining Tax Burden This variable is calculated by taking tax revenues from state and local taxes — excluding personal income, corporate income (including corporate license), property, sales and severance per $1,000 of personal income. Utah ranks 7th.
- Estate Or Inheritance Tax (Yes or No) This variable assesses if a state levies an estate or inheritance tax. Utah levees no estate or inheritance tax which puts it in the #1 ranking.
- Recently Legislated Tax Changes This variable calculates each state’s relative change in tax burden over a two-year period for the next fiscal year, using revenue estimates of legislated tax changes per $1,000 of personal income. Utah ranks 13th.
- Debt Service As A Share Of Tax Revenue This variable calculates interest paid on state and local debt as a percentage of state and local total tax revenue. Utah ranks 24th.
- Public Employees Per 10,000 Residents This variable shows the full-time equivalent state and local public employees per 10,000 of population. Utah ranks 18th.
- Quality of State Legal System This variable ranks tort systems by state. Utah ranks 19th.
- State Minimum Wage This variable indicates minimum wage enforced on a state-by-state basis. Utah ranks 1st (at $7.25/hr).
- Workers’ Compensation Costs This variable highlights the 2021 Workers’ Compensation Index Rate (cost per $100 of payroll). Utah ranks 6th.
- Right-to-Work State (Yes or No) This variable assesses whether or not a state allows employees to be forced to pay union dues as a condition of employment. Utah ranks 1st.
- Tax or Expenditure Limit This variable measures the influence of tax and expenditure limits on state tax revenue and spending. Utah ranks 15th.
The 16th edition of Rich States, Poor States can be downloaded here.
Utah's Governor, Spencer J. Cox, again applauded Utah's first place ranking in a tweet:
Utah’s being recognized as the state with the best economic outlook for the 16th year in a row!— Utah Gov. Spencer J. Cox (@GovCox) April 13, 2023
Read the full report here ⬇️https://t.co/DKINveHWHT#OneUtah #LetsGo pic.twitter.com/qVdRcTJFUD