(The Center Square) – North Carolina is ranked No. 4 in the country in economic outlook in the 18th annual Rich States, Poor States ranking.
Fifteen state policy variables are measured in the ALEC-Laffer State Economic Competitiveness Index, released Tuesday by the American Legislative Exchange Council. Better scores go to states spending and taxing less to attain higher growth rates.
Utah, Tennessee and Indiana were ahead of the Old North State. A year ago, North Carolina was fourth behind, respectively, Utah, Idaho and Arizona.
The rise over 15 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 has eclipsed 11 million, up 750,000 since 2014 the report says and 37% from the 8 million of the 2020 census.
North Carolina has been as high as No. 2 in the rankings.
“One of the reasons for that,” the report analysis says, “has been a long-term commitment from policymakers to cutting income taxes. The state’s economic performance has gradually improved to reflect the more competitive policy environment. The Tarheel State has been among the biggest winners from Americans’ voting with their feet through net domestic migration.”
The report says North Carolina ranks No. 27 in sales tax burden, showing room to improve, and No. 25 in public employees per 10,000 population.
North Carolina is No. 11 in economic performance rank, a measure that measures 2013-23 for state gross domestic product (13th), absolute domestic migration (3rd), and nonfarm payroll employment (10th).
In the 15 variables, North Carolina is top five nationally in estate/inheritance tax levied (none, tied 1st); minimum wage ($7.25 an hour); right to work (yes, tied 1st); and top marginal corporate income tax rate (2.25%, 4th).
The worst category was recently legislated tax changes (minus 59 cents, 30th).
