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ALEC report ranks Idaho sixth nationally in economic outlook

ALEC report ranks Idaho sixth nationally in economic outlook

Mitch Coffman
April 12, 2012
April 12, 2012

In a report from the American Legislative Exchange Council (ALEC), Idaho’s economic outlook continues to look good, ranked sixth in the nation. ALEC, based in Washington, D.C., describes itself as a “nonpartisan individual membership organization of state legislators which favors federalism and conservative public policy solutions.”

Idaho’s economic outlook has improved since the first year the report was published. In 2008 Idaho ranked 10th, 14th in 2009, seventh in 2010 and fifth in 2011.

ALEC on Wednesday released its fifth edition of “Rich States, Poor States: ALEC-Laffer Competiveness Index.” The report covered a variety of economic variables and conditions, but the economic performance rank and the economic outlook rank were the primary focal points of the report.

With regard to the economic outlook, which ALEC defines as “a forward-looking forecast based on the state’s standing in 15 important state policy variables,” Idaho’s sixth-place ranking is down one spot from last year when it ranked fifth, but the state has never been lower than 14th in the annual report.

Idaho’s spot near the top of the economic list comes with three of the variables used in the report seen as the best the nation has to offer, earning the state a first-place rank in those areas. Those three are Idaho is a right-to-work state, the state’s estate/inheritance tax levy is not considered punishable compared to other states and the Gem State’s minimum wage is low compared to other states thus creating some employment opportunities here in contrast to states with a higher minimum wage.

Other areas where Idaho fared well include property tax burden (14th), sales tax burden (27th), remaining tax burden (eighth) and recent legislated tax changes (10th).

Idaho’s neighboring states to the west didn’t fare too well with regard to their economic outlook. Washington ranked 33rd and Oregon ranked 45th. To the south, both Utah and Wyoming ranked fairly well, with Utah garnering the first position, Wyoming fourth and Nevada ranking 18th. To Idaho’s east, Montana ranked in the lower half with a rating of 36th.

Another interesting find by the authors was that states with no income tax had much higher job growth than those with an income tax. In general, those states with higher taxes did not rank well in the report.

Top 10 states rankings in economic outlook
1. Utah 2. South Dakota 3. Virginia 4. Wyoming 5. North Dakota 6. Idaho 7. Missouri 8. Colorado 9. Arizona and 10. Georgia.

Bottom 10 state rankings in economic outlook
50. New York 49. Vermont 48. Illinois 47. Maine 46. Hawaii 45. Oregon 44. Connecticut 43. Rhode Island 42. New Jersey and 41. Minnesota.

The performance rank, says ALEC, is a “backward-looking measure based on the state’s performance …” The ranking is determined by three variables, which are personal income per capita, absolute domestic migration and non-farm payroll employment. Idaho ranked individually in those areas 35th, 13th and eighth respectively.

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