(The Center Square) – Tax burdens growing a tick lighter for residents and businesses alike in Pennsylvania pushed the state’s economic outlook a tick higher, according to a recent report from the American Legislative Exchange Council.
ALEC, as it’s called for short, publishes the annual analysis “Rich States, Poor States” and rates each state based on labor policies the conservative organization deems better for personal and corporate wealth.
Pennsylvania’s economic performance ranked 43rd and its outlook came in 34th. The former looks back at how policy has shaped migration patterns, gross domestic product level and non-farm payroll employment rates. The latter measurement forecasts the economy’s performance.
Over the last six years, Pennsylvania’s forecast has hovered between 36 and 38, making the recent rating its best since 2019.
Although its top marginal tax rate and personal income tax rate ranked it among the lowest in the nation, the state’s federal-level minimum hourly wage of $7.25 and high rate of public employees were rated first and fourth, respectively.
The metrics reward “fly-over states” like Arkansas, Indiana and Oklahoma rank in the top 10 for economic outlook, while states like California, Hawaii, Illinois and New York, despite their stunning vistas or metropolitan attractions, rank in the bottom 10.
Utah earned the top spot.
“Utah doesn’t rank badly in any of the 15 variables,” Joshua Meyer, director of ALEC’s tax and fiscal policy task force, told The Center Square. “Until recently, it was actually above 25 (above the median) on every single one. The total state and local sales tax burden has been rising and is now 38th, but the state is 22nd or better on the other 14 variables.”
Utah ranked first for its state minimum wage of $7.25 per hour, which along with other states like Georgia and Wyoming, is the lowest in the country. Though a low minimum wage means a lower baseline pay for more low-wage hourly-paid positions, it also means lower labor costs for employers. It also has a relatively low corporate income tax, public employee population and tax burden overall (after considering property and sales tax).
Morgan Sweeney contributed to this report.
