Tennessee ranks eighth out of 50 states in economic outlook, according to the 2020 edition of Rich States, Poor States, released Wednesday.
The Virginia-based American Legislative Exchange Council published the book. Economists Jonathan Williams, Art Laffer, and Stephen Moore wrote it. The authors say they base a state’s economic outlook ranking on its current standing in 15 state policy variables.
As The Tennessee Star reported last year, Tennessee ranked seventh in the 2019 Rich States, Poor States report and 12th in the 2018 report. Tennessee ranked 19th in the 2014 report.
A No. 1 ranking is the best. A ranking of 50 is the worst.
On a conference call with reporters Tuesday, the three men said that a state’s income tax rates affect growth and prosperity.
For the 13th year in a row, Rich States, Poor States ranked Utah as the state with the best economic outlook. Williams, Laffer, and Moore said on Tuesday’s call that Utah officials kept a disciplined approach to budgeting and spending.
In addition to Tennessee, other top 10 states in ALEC’s list included Wyoming, Idaho, Indiana, North Carolina, Nevada, Florida, Oklahoma, and Arizona.
Williams, Laffer, and Moore said that the worst-ranking states included New York, Vermont, New Jersey, Illinois, California, Minnesota, Hawaii, Rhode Island, Oregon, and Maine. The three men also said officials in those states want a federal bailout.
Laffer was on U.S. President Ronald Reagan’s Economic Advisory Board and takes credit as “the father of supply-side economics.” Moore wrote for The Wall Street Journal. Williams is ALEC’s chief economist.
The report detailed the data the three men gathered for each state.
“Each of these factors is influenced directly by state lawmakers through the legislative process. Generally speaking, 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,” according to the report.
“The Economic Performance Ranking is a backward-looking measure based on a state’s performance on three important variables: State Gross Domestic Product, Absolute Domestic Migration and Non-Farm Payroll Employment — all of which are highly influenced by state policy. This ranking details states’ individual performances over the past 10 years based on this economic data.”
ALEC, according to its Facebook page, works to “advance the principles of limited government, free markets and federalism throughout the states.”
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