(The Center Square) – Michigan’s economic outlook continues a downward trend based on the American Legislative Exchange Council’s new rankings.
The 18th edition of the ALEC-Laffer State Economic Competitiveness Index “Rich States, Poor States” report showed Michigan’s outlook is better than most of the nation at 19th, but that’s seven spots lower than the state’s 2019 ranking.
ALEC is an association of state lawmakers focused on free markets, small markets and federalism, according to its website.
Since coming in at 12th in 2019, Michigan has fallen in four of the last six years. It’s fallen three spots from last year.
ALEC President and Chief Economist Jonathan Williams credits Michigan’s relatively high ranking to tax cuts and deregulation under Gov. Richard Synder nearly 10 years ago.
He blames the steady dip on the state’s repeal of right-to-work laws when Democrats controlled the House, Senate and governor’s office.
Republicans now control the House, but Democrats still control the Senate and have Gov. Gretchen Whitmer.
“Losing right-to-work had a real impact on Michigan’s competitiveness. There’s a lot of work ahead to turn things around,” Williams said. “Michigan is stuck with divided government. Speaker Matt Hall and the Michigan House have passed some tax cuts, but they’re unlikely to make it through the Senate or get signed by the current governor. Still, looking ahead to 2026, Michigan has a real opportunity to rebound.”
Michigan’s top rankings came in the area of estate/inheritance tax levied (first), tax expenditure limits (third) and public employees per 10,000 population (sixth).
It ranked poorly in right-to-work (50th) and debt service as a share of tax revenue (41st).
Among its neighboring states, Michigan ranked behind Indiana (third) but ahead of Ohio (25th), Wisconsin (26th), Minnesota (41st) and Illinois (46th).
