Virginia Ranks 12th Nationwide in Economic Outlook

Date: June 02, 2015

It’s seen the good and the bad, but the future of Old Dominion is looking pretty strong.

Virginia ranks No. 12 in the nation in economic outlook, according to a new report from the American Legislative Exchange Council. The report shows that Virginia also did fairly well in past economic performance, coming in at No. 16.

These two figures are determined by ALEC’s annual “Rich States, Poor States” study, which evaluates the past, present and future of each state’s economy.

For the economic outlook ranking, ALEC examines a list of 15 policies to determine prospective economic growth in each state. Similarly, the economic performance rating is calibrated from statistics about states’ gross domestic product, absolute domestic migration and non-farm payroll employment.

In the eight years that ALEC has released this report, No. 12 is the lowest Virginia has ever come in. For six years, Virginia consistently ranked in the top 10, peaking at No. 3. But in 2014, the state’s economic outlook grade dropped from No. 5 to No. 11, and continued its fall with this year’s No. 12 rating.

Still, this doesn’t necessarily mean that Virginia is doing any worse, just that other states are doing better. Virginia’s high points are quality state legal system, its status as a right-to-work state and zero estate/inheritance tax.

In fact, Virginia has improved in several factors: property tax burden has decreased to $29.09, the remaining tax burden is down to $15.84 and the sales tax burden is the lowest it’s been in years at $11.69 (all numbers are per $1,000 of personal income).

The low points are its high corporate income tax rate (now 7.49 percent) and a $1.02 addition to taxes per $1,000 of personal income.

In economic performance, Virginia had an overall ranking of No. 16. The state was in the middle of the pack: No. 22 in state gross domestic product with 47.3 percent growth and No. 18 in non-farm payroll employment with 6.9 percent growth.

But the state is doing the best in absolute domestic migration, coming in at No. 12 with approximately 120,000 new Virginians over the past decade.

At number one on the charts for economic performance is Texas, which reported outstanding growth for all three factors. Michigan came in last at No. 50, due to the loss of more than 600,000 residents and a 6.4 percent decrease in non-farm payroll employment.

Over on the economic outlook side, Utah tops the list for the eighth year in a row, thanks to zero personal income tax progressivity and a high quality state legal system. New York pulled in last due to all-around high taxes.


Related Content: Small Business News | Economy | Virginia

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