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GOP-Led States Rank Highest For Economic Outlook: New Report

Economist says low taxes and smaller government leads to better economic outcomes


GOP-Led States Rank Highest For Economic Outlook: New Report

Republican-led states rank as the best in the nation for economic performance, according to a new report that ranks all 50 states.


The American Legislative Exchange Council’s (ALEC’s) annual report entitled “Rich States, Poor States” considers a number of factors influenced directly by state lawmakers to create its economic rankings.


Utah, North Carolina, Arizona, Idaho, and Oklahoma are the top five states in the economic outlook rankings for 2023.


The five worst states are New York, Vermont, Minnesota, New Jersey, and Illinois.


“The proof is in the pudding,” Jonathan Williams, ALEC’s chief economist who co-authored the report, told The Center Square. “Utah was the fastest growing state in the country by population, over 18 percent population growth in the last decade. So one of the key themes that we see not just in Utah but in so many of the top ten or the top half of states is that states that get it right with policy are getting it right with migration as people continue to vote with their feet. Taxpayers are continuing to vote with their feet against high-tax states and going toward states that offer more economic opportunity and really a better quality of life and a lower cost of life.”


In considering it’s rankings, ALEC analyzes variables such as a state’s gross domestic product, domestic migration data, non-farm payroll employment, top marginal personal income tax rate, top marginal corporate tax rate, and property tax burden.


Among the other factors considered are a state’s debt service as a share of tax revenue, minimum wage, and public employees per 10,000 residents.


“This isn’t just theory,” Williams said. “These are items that we know both from an academic perspective, these policies that we track … things that we know matter just from an historical perspective but then now in the last 16 years it has been just phenomenal to look at. It’s not just a theory. It actually works in practice.”


The data indicate a difference in economic outcomes by party-affiliation. Overall, the top ten states are nearly all led by Republicans, while the worst ten states are all led by Democrats.


“The states that followed the free market formula of keeping taxes low and keeping regulations limited, empowering workers, empowering taxpayers across the board are the fastest growing states in America,” Williams added.

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