The Leaflet – 2015 State Economic Outlook Rankings

Published April 9, 2015

The Leaflet – 2015 State Economic Outlook Rankings

For the eighth year in a row, Utah earned the top ranking for economic outlook in the newest edition of the American Legislative Exchange Council’s (ALEC) annual Rich States, Poor States book. This must-read report ranks all 50 states on 15 economic policies, including various tax, regulatory, and labor policies that give state lawmakers yearly apples-to-apples comparisons of how policies are helping or hurting their economic outlook.

The top five states for economic outlook in the report were Utah, North Dakota, Indiana, North Carolina, and Arizona. The bottom five states were New Jersey, Connecticut, Minnesota, Vermont, and New York. The most improved states from 2014 were Kentucky, which moved up nine spots, and Illinois, which climbed eight spots. Michigan was the biggest loser this year. It fell 12 spots. Delaware also performed poorly compared to the 2014 report, falling 11 spots.

States such as Kansas, North Carolina, and Wisconsin are already benefiting from significant tax and labor reforms they put into place over the past two years. The momentum behind tax reform and setting revenue triggers is likely to continue as states look for ways to spark their economies.

“The big story this year is the bipartisan embrace of state tax cuts,” said Jonathan Williams, vice president of the ALEC Center for State Fiscal Reform and co-author of Rich States, Poor States: ALEC-Laffer State Economic Competitiveness Index. “States are increasingly realizing the need to become more competitive through fiscal responsibility and free-market economic reforms. We anticipate 2015 will be a record year for pro-growth tax reform.”

What We’re Working On

Budget and Tax
Research & Commentary: Idaho Tax Reform
Idaho legislators are considering a major tax reform proposal that would eliminate both the sales tax and the tax credit for groceries, establish a flat tax for upper-income earners, and institute a 7 cent fuel-tax increase. The proposal would also increase transportation funding. The Idaho Freedom Foundation has argued Idaho’s 7.4 percent marginal income tax rate has long been an impediment to the state’s economic growth and businesses have chosen not to move or expand in Idaho because of it. In this Research & Commentary, Senior Policy Analyst Matthew Glans argues reducing income taxes is one of the best ways to improve a state’s economy and that the Idaho tax reform proposal takes several steps toward making Idaho a more competitive state. Read more

Energy and Environment
NEPA Guidance for CO2 Emissions is Bad Policy Based on Bad Science
Marlo Lewis, senior fellow with the Competitive Enterprise Institute, drafted a powerful rebuke of the Council on Environmental Quality’s recent draft guidance to require a National Environmental Policy Act (NEPA) review of potential climate change effects caused by increased levels of greenhouse gas emissions from federal projects and projects requiring federal permits. In this Climate Change Weekly article, Research Fellow H. Sterling Burnett discusses environmental impacts of assessments for potential climate change. Burnett said, “[T]he NEPA review is an inappropriate framework for making climate policy. All the important evidence suggests project-related greenhouse gas emissions should not be a factor when determining whether agencies grant or deny permits for individual projects and, as a result, CEQ should withdraw the guidance.” Read more


Research & Commentary: Alabama Common Core Repeal

Alabama legislators are debating a proposal that would repeal the state’s implementation of Common Core State Standards, a set of requirements for what elementary and secondary school children should know in each grade in math and English. Alabama was one of 41 states to promise the federal government it would adopt Common Core five months before it was published. Other states, such as Alaska, Nebraska, Texas, and Virginia, never adopted the standards, and a recent nationwide backlash has led to successful repeals in Indiana, Missouri, Oklahoma, and South Carolina. In this Research & Commentary, former Policy Analyst Taylor Smith and State Government Relations Manager Logan Pike argue government-mandated, single-style progression of learning is unlikely to be the best way to accommodate the individuality of Alabama’s 746,204 students. Read more

Health Care
Research & Commentary: Georgia Certificate-of-Need Reform
Georgia is one of 36 states with certificate-of-need (CON) laws. CON laws are intended to slow the growth of health care prices, promote consolidation of health care providers, and limit duplication of services. The Georgia Public Policy Foundation has long expressed concerns about Georgia’s certificate-of-need program and argued consumer-driven coverage and transparency are critical to a sound health care system. In this Research & Commentary, Senior Policy Analyst Matthew Glans argues Georgia lawmakers should consider reforming the state’s CON program again to end burdensome regulations that increase the cost of health care while limiting access and benefitting those with political connections. Read more

Lawmakers Propose Plan to Block FCC’s ‘Net Neutrality’ Regulations
Alexander Anton examines a proposed plan from congressional lawmakers that would halt FCC’s 400-page “net neutrality” regulations before they are implemented and would prevent future regulators from granting themselves similar authority. Proposed by Reps. Marsha Blackburn (R-TN) and Bob Latta (R-OH), the Internet Freedom Act would block FCC’s plan to regulate Internet service providers (ISP) as utility companies. Anton speaks with several telecom experts who support the effort to combat FCC overreach. Read more

From Our Free Market Friends

Rich States, Poor States

The American Legislative Exchange Council (ALEC) released the 8th edition of its Rich States, Poor States book that ranks all 50 states by 15 different economic variables and the economic outlook for these states. “The big story this year is the bipartisan embrace of state tax cuts,” said Jonathan Williams, vice president of the ALEC Center for State Fiscal Reform and co-author of Rich States, Poor States: ALEC-Laffer State Economic Competitiveness Index. Read more