ALEC gives state better marks than last year
The American Legislative Exchange Council just released its Economic Outlook Rankings for every state, and Nevada came in 8th on the forward-looking forecast. This is a significant improvement from the past three years when Nevada ranked 13th (2013), 18th (2012) and 17th (2011).
ALEC’s forecasts are based on the state’s standing in 15 important state policy variables such as Personal Income Tax Rate, Corporate Income Tax Rate, Personal Income Tax Progressivity, Property Tax Burden, Sales Tax Burden, etc.
All15 state policy variables are influenced directly by state lawmakers through the legislative process. Data reflect state and local rates and revenues and any effect of federal deductibility.
“While this ranking is positive news for our economy, I’m concerned that if the voters approve the margin tax this fall, Nevada’s economic outlook will drop dramatically,” said NFIB State Director Randi Thompson. “We will have a corporate tax rate twice that of California’s, which at 8.84 percent ranks them as the 38th worst state for business taxes in the nation.”
Added Assembly Minority Leader Pat Hickey, an NFIB member: “Stopping the margin tax will keep the Silver State high on the list of states that extend an open arm to revenue-producing businesses." said Hickey.
By comparison, neighboring California is ranked 47th overall in the economic outlook, primarily because of their top marginal personal income tax rate (50th), top marginal corporate income tax rate (38th) and personal income tax liability (50th).
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, according to the report, which can be read here.
The top ten in the 2014 Economic Outlook Rankings are the following:
- South Dakota
- North Dakota
- North Carolina
ALEC also does an Economic Performance Ranking that is a backward-looking measure based on a state’s performance on three important variables: state gross domestic product, absolute domestic migration, and non-farm payroll employment. Nevada ranked 7th in economic performance ranking.
The top ten Economic Performance Ranking states include the following:
- North Dakota
The three factors evaluated for the performance ranking are all variable that are highly influenced by state policy makers.
Nevada dipped in all three of these categories during the 2009-2011 recession, but has seen slight upticks in all three categories in 2012.