Utah's economic outlook best in U.S. for 14th straight year

By Brice Wallace

On the bright side, Utah has a 14-year winning streak. On the down side, it has some competition.

That’s the case with the “Rich States, Poor States” ALEC-Laffer State Economic Competitive Index, in which Utah has topped the state rankings for economic outlook every year the report has been issued.

Published by the American Legislative Exchange Council Center for State Fiscal Reform, the report ranks the economic competitiveness of states using 15 equally weighted policy variables. Generally, states that spend less and tax less experience higher economic growth rates than states that tax and spend more, ALEC says.

“It’s an extreme honor to be No. 1 for 14 years in a row,” Utah Senate President Stuart Adams told the report co-authors during an online news conference last week. “I wanted to let you to know, Utah is not tired of winning.”

Stephen Moore, an economist at FreedomWorks, told Adams that Florida “is right on your heels.”

“I heard that,” Adams replied, “but they’re not going to take us, OK?”

Utah and Florida were followed by Oklahoma, Wyoming and North Carolina. The bottom-ranked state is New York, with Vermont, New Jersey, Illinois and Minnesota making up the rest of the bottom five.

The report also looked at economic performance from 2009 to 2019. Utah was ranked No. 4 on that list, which was topped by Texas. Among the factors considered for that ranking, Utah was No. 1 among states for absolute domestic migration, No. 3 for state gross domestic product, and No. 13 for non-farm payroll.

Utah was boosted in the rankings for having the nation’s top population growth, a low unemployment rate, high upward mobility rates, a low poverty rate, and being one of only two states with employment increases during the pandemic, Adams said.

“People vote with their feet,” he said of the state’s strong in-migration. “We think have great tax policies, a great regulatory environment, and as I look around and see what other states are doing, we’re going to have to keep working because I think there’s a lot of people nipping at our heels, but we’re not going to give up.”

Moore said census statistics are showing that people are leaving places for economic and political reasons, including an exodus from high-tax, high-cost states.

Adams said Utah is seeing a lot of New York and California car license plates, and the trend likely will be accelerated as remote work allows people to, for example, maintain a job with a California company while living and enjoying the high quality of life in Utah.

“And why wouldn’t you do that,” he asked, “when you have a [California] regulatory environment that is just so difficult for people to have a decent quality of life?”

Speaking generally, co-author and Reagan economist Arthur B. Laffer said that Utah had again showed “that the tried and true policies really work.”

Jonathan Williams, ALEC’s chief economist and executive vice president of policy, called Utah’s top ranking for 14 consecutive years “just an incredible, incredible accomplishment.”

Among the reasons, Williams said, are property tax reform, pension reform and Utah “getting ready for the day” that the federal government decides to reduce federal aid to the states.

“And,” he said, “the prudence in how Utah’s prepared themselves and been ahead of the policymaking curve is, I think, the secret sauce to Utah’s success now for 14 years at No. 1.”