R.I. ranks No. 41 in national economic outlook report

THE 2014 ALEC-LAFFER State Economic Competitiveness Index placed Rhode Island at No. 41 overall for economic outlook and No. 47 for economic performance. Above, charts showing Rhode Island's performance in the state gross domestic product and non-farm payroll employment, two of the variables used to calculate the No. 47 economic performance ranking. For both categories shown in the graphs, Rhode Island ranked at No. 48 nationally. / COURTESY AMERICAN LEGISLATIVE EXCHANGE COUNCIL
THE 2014 ALEC-LAFFER State Economic Competitiveness Index placed Rhode Island at No. 41 overall for economic outlook and No. 47 for economic performance. Above, charts showing Rhode Island's performance in the state gross domestic product and non-farm payroll employment, two of the variables used to calculate the No. 47 economic performance ranking. For both categories shown in the graphs, Rhode Island ranked at No. 48 nationally. / COURTESY AMERICAN LEGISLATIVE EXCHANGE COUNCIL

PROVIDENCE – Rhode Island’s economic outlook ranked No. 41 among the 50 U.S. states according to the 2014 ALEC-Laffer State Economic Competitiveness Index released Tuesday by the American Legislative Exchange Council.

The annual report ranks each state according to 15 equally weighted policy variables, including personal and corporate income tax rates, number of public employees, tax burden and the minimum wage. Economists Arthur B. Laffer and Stephen Moore co-authored this year’s report, its seventh edition, with Director Jonathan Williams of ALEC’s Center for State Fiscal Reform.

Rhode Island’s ranking at No. 41 in the 2014 report was an improvement over last year, when the Ocean State landed at No. 45.

Among the rated variables, Rhode Island earned relatively high rankings in public employees per 10,000 of population (No. 7), sales tax burden (No. 14), remaining tax burden (No. 23) and top marginal personal income tax rate (No. 26).

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For two categories, the ALEC-Laffer report ranked each state either No. 1 for a “yes” answer or No. 50 for a “no” answer in response to whether the state is a right-to-work state giving workers the option to join or support a union, and whether an estate/inheritance tax is levied in the state. In both categories, Rhode Island ranked No. 50.

Rhode Island also scored poorly for property tax burden (No. 47), debt service as a share of tax revenue (No. 42), top marginal corporate income tax rate (No. 40) and state minimum wage (No. 39).

Utah’s overall economic outlook ranked No. 1 for the second year in a row, with South Dakota, Indiana, North Dakota and Idaho rounding out the top five. New York was listed as the state with the worst economic outlook in 2013, followed by Vermont, Illinois, California and Minnesota – the same five states that landed at the bottom of the list in 2013.

Massachusetts moved up one spot this year to No. 28 from No. 29 in last year’s ranking, and scored in the top 10 for remaining tax burden (No. 2), average workers’ compensation costs (No. 7), public employees per 10,000 of population (No. 8) and sales tax burden, (No. 9).

In addition to the economic outlook ranking, the ALEC-Laffer report also listed the states’ economic performance rank, a “backward-looking measure” based on state gross domestic product, absolute domestic migration and non-farm payroll employment over the past 10 years.

Rhode Island ranked No. 47 for overall economic performance, leading only New Jersey, Ohio and Michigan. The Ocean State’s gross domestic product and non-farm payroll employment both ranked the third-lowest in the country for the last 10 years, while absolute domestic migration performed slightly better at No. 39.

In 2013, Rhode Island’s economic performance ranked three spots higher at No. 44.

Massachusetts joined Rhode Island in the bottom 10 for economic performance in the 2014 report, landing at No. 41. A year earlier, Massachusetts ranked at No. 45 for economic performance. The Bay State ranked No. 43 in absolute domestic migration, No. 36 in non-farm payroll employment and No. 38 in state gross domestic product.

To view the complete 2014 report, visit http://alec.org.

The American Legislative Exchange Council is a nonpartisan, voluntary membership organization of state legislators and includes nearly one-third of all U.S. state elected officials.

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