(The Center Square) – Utah ranked first for economic outlook for the 18th year in a row, according to the annual Rich States, Poor States report, but also noteworthy are the positive findings for Louisiana, Tennessee, West Virginia and Arkansas.
The American Legislative Exchange Council’s yearly report has a backward- and forward-looking component. It ranks states for their economic performance from 2013-2023 based on three indicators, as well as ranking them for their economic outlook based on the status of 15 economic policies set mostly at the state level.
To assess states’ economic performance, the report’s authors look at the state’s cumulative gross domestic product, non-farm payroll employment and absolute domestic migration over a 10-year period. Absolute domestic migration measures the total number of people who have moved to a state against the total number who have left the state in a given period of time.
“When you look at broad economic performance indicators, they’re three of the most-cited,” ALEC President and Chief Economist Jonathan Williams told The Center Square. “Of the three of those factors, I think by far the most important one for policy makers to look at is the net domestic migration figure: Is the state growing or is it shedding people?”
Reagan economist Arthur Laffer is one of those authors, known for supply-side economics and the Laffer Curve. He also popularized the idea that people “vote with their feet,” implying that a state’s economic health, including its tax policies, often plays a big role in Americans’ decisions to leave a given state and move to another.
Utah ranked third for economic performance from 2013-2023 and first for economic outlook, according to the report. Over that same period of time, it ranked 13th for absolute domestic migration, with a net gain of over 126,400 people.
“Utah’s consistent top ranking is a testament to the principles that have guided our state for nearly two decades – low taxes, responsible spending and policies that foster innovation and opportunity,” Utah Senate President J. Stuart Adams said in a statement.
Of the 15 indicators assessed for economic outlook in the report, Utah earned a No. 1 ranking for three – its estate tax and right-to-work policies and its minimum wage of $7.25 per hour. The state does not levy an inheritance tax and it is a right-to-work state.
In addition, the report “[highlighted] impressive upward mobility” for Louisana, West Virginia and Arkansas. Louisiana jumped 13 spots in economic outlook, from 31st in 2024 to 18th in 2025 due to a “sweeping tax overhaul [that] boosted its competitiveness across major tax categories,” according to ALEC. Tennessee also earned its best ranking ever, placing second for economic outlook. West Virginia also finished 16th, seven spots above 2024, for “continued improvements in fiscal policy.”
Louisiana’s results marked “an incredible turnaround for what had been a laggard state in the Southeast, which is an incredibly competitive region,” Williams told The Center Square. The state’s recent passage of a flat tax was a big part of why it climbed so far in the rankings.
“Those were our three big winners in terms of states that improved,” Williams said, but he added that Arkansas was also worth mentioning.
Arkansas ranked higher than it ever has in the history of the report, landing in 10th place for economic outlook “due to recovering some of the most aggressive tax cuts of any state in the last several years,” Williams said.
The states with the worst economic outlook, according to ALEC, are New York, Vermont, New Jersey, California and Illinois.
