(The Center Square) – North Carolina is ranked No. 4 in the country in economic outlook in the 19th annual Rich States, Poor States ranking.
Fifteen state policy variables are measured in the ALEC-Laffer State Economic Competitiveness Index, released Wednesday by the American Legislative Exchange Council. Better scores go to states spending and taxing less to attain higher growth rates.
Utah, Tennessee and Idaho were ahead of the Old North State. Two years ago, North Carolina was fourth behind, respectively, Utah, Idaho and Arizona.
The rise over 16 years coincides with the General Assembly in the 2010 midterms being won – both chambers – by Republicans for the first time in 140 years since Reconstruction following the Civil War. The budget deficit then was between $800 million and $1.2 billion, and the turnaround of roughly $6 billion sent the state’s surplus to more than $5 billion prior to Hurricane Helene.
In 2011, the North Carolina was No. 26 in Rich States, Poor States. Corporate income tax reductions are on the way to elimination in 2030, and flat tax switch in 2014 continues to fuel the outlook. Population of the state is an estimated 11.2 million, up 756,000 in the last five years according to the U.S. Census Bureau.
North Carolina has been as high as No. 2 in the rankings, hitting the mark in both 2022 and 2023.
“Generally speaking,” the report explains, “states that spend less – especially on income transfer programs – and states that tax less – particularly on productive activities such as working or investing – experience higher growth rates than states that tax and spend more.”
North Carolina’s population has grown by 756,000 over the last five years, says U.S. Census Bureau numbers released in January.
The ninth-largest state in America has a population estimated at 11.2 million and is projected to reach 11.9 million by 2030. Analysis regularly bills North Carolina among the best states in which to do business, with tax friendly policies that since Republicans won majorities in both chambers of the Legislature in 2010 have included reductions for income tax from individuals and corporations.
Additionally, it’s one of 10 to 15 states with both definitive mountains and beaches.
The economic performance rank is ninth. In the 15 categories scored, the state is tied or at the top as a right to work state, minimum wage of $7.25, and no inheritance tax levied. Top marginal corporate income tax rate of 2% is fourth, and state tort system costs (1.5%) and property tax burden ($19.80) are each eighth.
The worst rankings are No. 28 for recently legislated tax changes ($0), and No. 27 for sales tax burden ($25.49).
