Utah has best economic climate in country, New York worst: report

Republican-led red states are overall in a much better economic situation than Democrat-led blue states, according to a new report that ranks the economic outlook of all 50 states.

The latest analysis published by the American Legislative Exchange Council (ALEC), a nonprofit of state legislators “dedicated to the principles of limited government, free markets, and federalism,” ranked Utah as having the best economic climate in the country for the 14th straight year.

The annual “Rich States, Poor States” report, authored by economists Stephen Moore, Arthur Laffer, and Jonathan Williams, calculated each state’s economic outlook by taking into account 15 variables — such as its taxes, minimum wage, policies toward unions, and quality of legal system — to create a final ranking. The authors noted that each variable is directly influenced by state lawmakers through the legislative process.

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Mostly red states joined Utah atop the list of best economic outlook for 2023. Here’s the top 10:

1. Utah
2. North Carolina
3. Arizona
4. Idaho
5. Oklahoma
6. Wyoming
7. Indiana
8. North Dakota
9. Florida
10. Nevada

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The bottom 10, meanwhile, were dominated by the nation’s bluest states, with New York coming in at last place: 

1. Maryland
2. Hawaii
3. Oregon
4. Maine
5. California
6. Illinois
7. New Jersey
8. Minnesota
9. Vermont
10. New York

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“‘Rich States, Poor States’ provides more powerful evidence that the low tax, light regulation states are bleeding the high tax states dry,” said Moore, a senior fellow at the Heritage Foundation. “Utah has been number one for 14 years because of its solid pro-business policy regime. If states like New York, California, and Illinois don’t change their taxing and regulating ways, they will continue to shrink into economic oblivion. These states have lost more than 5 million people over the last decade.”

Economic factors seem to be factoring into where Americans are moving. The 10 highest tax states lost nearly 1 in 100 residents in net domestic migration between July 2021 and July 2022, while the 10 lowest tax states gained almost 1 in 100, according to a recent analysis by James Doti, president emeritus and economics professor at Chapman University. 

Last month, a study found that New York imposes the most burdensome taxes on its residents of all the country’s 50 states

The “Rich States, Poor States” report also ranked each state’s economic performance over a 10-year period from 2011 to 2021 based on three variables: “state gross domestic product, absolute domestic migration, and non-farm payroll employment — all of which are highly influenced by state policy.”

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Once again, Utah ranked near the top, only eclipsed by Florida. Mostly red states joined them in the top 10:

1. Florida
2. Utah
3. Arizona
4. Idaho
5. Colorado
6. Washington
7. Texas
8. Georgia
9. South Carolina
10. North Carolina

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The bottom 10 included a mix of both red and blue states:

1. Vermont
2. New Mexico
3. Wyoming
4. Illinois
5. Hawaii
6. Pennsylvania
7. West Virginia
8. Connecticut
9. Alaska
10. Louisiana

One of the more striking drop-offs in the rankings was Washington, which ranked highly in economic performance over the last decade but came in at 34th for economic outlook for this year. Last month, the state’s Supreme Court upheld a new capital gains tax recently adopted by lawmakers.