Report gives South Dakota high marks for economic outlook



(The Center Square) – South Dakota ranked seventh in a report measuring the state’s economic outlook based on 15 state policy metrics.

The 2024 Rich States, Poor States: ALEC-Laffer State Economic Competitiveness Index published annually places South Dakota first in personal income tax and corporate tax rates. The state does not levy either tax or an estate or inheritance tax.

The state received a lower mark for its sales tax rank, coming in at 41st. The sales tax burden on $1,000 of personal income is $29.70, according to the report. The remaining tax burden is $16.85 of personal income, placing the state at 31st in the category.

South Dakota has 519.6 public employees per 10,000 residents, which puts the state at 32nd overall.

This is the 17th annual report issued by the American Legislative Exchange Council. Utah is ranked at the top, followed by Idaho and Arizona. New York placed last, with Vermont and Illinois rounding out the bottom three states based on the 15 metrics.

“Each of these factors is influenced directly by state lawmakers through the legislative process,” ALEC said in its report. “Generally speaking, 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.”

The report also measures states’ economic performance rank based on gross domestic product, domestic migration and non-farm payroll employment. South Dakota ranked 17th overall in the backward-looking measure.

The state gained 22,523 residents between 2013 and 2022, placing it at 21st for domestic migration. Gov. Kristi Noem launched an advertising campaign in 2023 to lure workers to South Dakota.

The third phase of the Freedom Works Here campaign launched on April 8. Nearly 2,000 people have made the final step to move to South Dakota, according to recent information from the governor’s office.

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