Brice Wallace
Salt Lake Business Journal
What lasts for 18 years?
Cars? Friendships? Careers? Marriages?
One constant for that long is Utah earning the top economic outlook among states in the “Rich States, Poor States: ALEC-Laffer State Economic Competitiveness Index.” The Beehive State recently — and again — took the top economic outlook spot, making it No. 1 for every single year since the index debuted 18 years ago.
The economic outlook is a forecast based on the state’s standing in 15 state policy variables. Data reflect state and local rates and revenues and any effect of federal deductibility.
Meanwhile, Utah finished No. 3 for economic performance, a backward-looking measure based on the state’s performance in three performance variables that are highly influenced by state policy.
The annual index is published by the American Legislative Exchange Council, a nonpartisan, nonprofit, voluntary membership organization of state legislators dedicated to the principles of limited government, free markets and federalism. It is co-authored by Reagan economist Arthur B. Laffer, policy expert Stephen Moore, and ALEC President and Chief Economist Jonathan Williams.
The economic outlook ranking is a forecast based on a state’s current standing in 15 state policy variables. 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, the report says.
Just behind Utah in economic outlook are Tennessee, Indiana, North Carolina and North Dakota. The worst-ranked state is New York, a spot it has occupied for 12 consecutive years.
Utah finished No. 6 for average workers’ compensation costs, No. 7 for recently legislated tax changes, No. 10 for “remaining” tax burden, No. 11 for debt service as a share of tax revenue, No. 12 for top marginal corporate income tax rate, No. 13 for personal income tax progressivity, No. 15 for both property tax burden and tax expenditure limits, No. 16 for public employees per 10,000 population, No. 19 for top marginal personal income tax rate, No. 22 for state liability system costs as a share of state GDP, and No. 40 for sales tax burden.
Utah also benefited from having no estate/inheritance tax, a state minimum wage that matches the federal minimum, and being a right-to-work state.
“Utah claims the top spot in the economic outlook ranking for an unprecedented 18 consecutive years,” the report states. “Leading the nation in job and state GDP growth, the Beehive State’s economy isn’t just stable, it’s thriving. This sustained success is no accident as Utah’s leaders have consistently championed pro-taxpayer reforms, from enacting flat personal and corporate income taxes to eliminating estate and death taxes. Their forward-thinking approach to property tax reform has further cemented Utah’s reputation as a national model for economic competitiveness and opportunity.”
Appearing on “The Hugh Hewitt Show” on the Salem News Channel, Williams was asked by Hewitt if Utah is “ever going to be dethroned?”
“Utah has got an incredible economic record,” Williams replied. “What they’ve done here, Hugh, is so special in the fact that they’ve done what many other states haven’t [or] have only dreamed of doing, which is real pension reform, addressing property taxes through their truth-in-taxation law, and becoming the first flat-tax state.”
Williams commended state legislative leaders — Senate President Stuart Adams and House Speaker Mike Schultz — for looking to keep Utah at No. 1 not just for the next year but the next decade. “And I think that kind of forethought and planning has been exactly what it has taken to keep them there now for 18 years in a row,” Williams said.
Utah finished behind No. 1 Florida and No. 2 Arizona in the economic performance rankings. Last was Louisiana. Among elements in the ranking, Utah was No. 1 for cumulative GDP growth from 2013 to 2023 and for nonfarm employment growth during that period, and No. 13 for cumulative domestic migration from 2014 to 2023.
The annual index aims to provide state lawmakers with clear, data-driven insights into how tax and fiscal policies impact economic competitiveness. It highlights the direct connection between free-market reforms — like cutting taxes, reducing debt and limiting government overreach — and stronger economic growth.
“Utah’s consistent top ranking is a testament to the principles that have guided our state for nearly two decades: low taxes, responsible spending and policies that foster innovation and opportunity,” Adams said. “But this isn’t just about rankings; it’s real people and real opportunities. A thriving economy means more jobs, better wages and a higher quality of life for all Utahns.”
Williams said the index “once again illustrates that Americans vote with their feet — leaving high-tax, high-regulation states in favor of those embracing low taxes, balanced budgets and worker freedom. The states leading our rankings thrive because they put the people first.”
On the Hewitt show, Williams said states in the bottom of the outlook rankings have big-government policies, high taxes and “then they play special favorites and they pick winners and losers based on who has the best lobbyist in the state capitol.” Meanwhile, states in the top 10 have a very free-market outlook, low taxes, incentivize entrepreneurs and small business “and it’s just a much different environment of getting government out of the way of businesses and individuals, versus having government be empowered to make all the decisions,” he said.
ALEC CEO Lisa B. Nelson said that to realize President Trump’s vision for a ‘Golden Age of America,’ the path to economic revival “must run through the states.”
“The 18th edition of ‘Rich States, Poor States’ demonstrates that states embracing free-market principles become magnets for families, job creators and opportunity,” Nelson said. “ALEC is proud to spotlight this competition and celebrate the states leading America’s comeback.”