Arkansas ranks high on economic outlook report

The American Legislative Exchange Council rates Arkansas high on an economic outlook list as part of its “Rich States, Poor States” report.

Helping Arkansas rank 12th among the 50 states was a low property tax burden, the lack of an estate tax, being a right-to-work state and having a low minimum wage, according to the ALEC-Laffer State Economic Outlook Index. Arkansas ranked 11th in 2008.

Arkansas also ranked 15th in terms of economic performance between 1997 and 2007. A 55.8% growth in per capita personal income, according to the ALEC-Laffer index, helped Arkansas secure the ranking.

The American Legislative Exchange Council is the nation’s largest individual membership organization of state legislators dedicated to advancing the principles of free markets, limited government, federalism and individual liberty.

Arthur Laffer, an economist best known for his supply-side economic theories espoused by President Ronald Reagan, helped prepare the index based on states with low tax and regulatory burdens.

Utah ranked first on the economic outlook list, with the top five rounded out by Colorado, Arizona, Virginia and South Dakota. New York ranked last on the list, with Vermont, Rhode Island, Maine and New Jersey rounding out the bottom five.

The ALEC-Laffer State Economic Outlook Index is based on 15 factors, with those including the marginal personal income tax rate, property tax burden, sales tax burden, debt service as a share of tax revenue, public employees per 1,000 residents and quality of a state’s legal system.

“As our elected officials think about beginning the annual task of budget writing, we remind lawmakers that levying tax increases is not a sustainable answer for budget problems,” noted the authors of the ALEC report. “Especially during an economic downturn, states need to be doing everything they can to become more competitive, not less.”

The report also includes figures from the National Association of State Budget Officers indicating that 31 states have reported budget gaps totaling $29.7 billion for fiscal year 2009 since budget enactment.

“The historical evidence is clear: States that keep spending and taxes low exhibit the best economic results, while states that follow the tax-and-spend path lag far behind,” according to the ALEC report.

The American Legislative Exchange Council is the nation’s largest individual membership organization of state legislators dedicated to advancing the principles of free markets, limited government, federalism and individual liberty.