Report: Red States Have Better Economic Performance Than Blue States

A new report, called "Rich States, Poor States," issued by the American Legislative Exchange Council on state economies, shows states mostly governed by Republicans outperform states mostly governed by Democrats.

Those ranked in the top ten in economic performance from 2001 to 2011 were, in order from first place to tenth place: Texas, Nevada, Utah, Wyoming, North Dakota, Idaho, Arizona, Alaska and Montana. Those in the bottom ten, in order from 40th to 50th place are: Mississippi, Wisconsin, Missouri, California, Rhode Island, Massachusetts, Connecticut, Illinois, New Jersey, Ohio and Michigan.

The only states in the top 10 that mostly vote for Democrats are Nevada and Washington, and the only states in the bottom 10 that are not mostly Democratic are Ohio and Missouri, which are swings states, switching between Republican and Democratic administrations.

ALEC is a conservative think tank dedicated to advancing free-market and limited government ideas. The authors of the report are economist Dr. Arthur Laffer, Stephen Moore, a member of the Wall Street Journal editorial board, and Jonathan Williams, director of the Center for State Fiscal Reform and the Tax and Fiscal Policy Task Force at ALEC.

Laffer is also known as the "father of supply-side economics," for his "Laffer Curve" theory, which influenced the tax cuts during the Ronald Reagan and George W. Bush presidencies. The Laffer Curve proposes that there is a point at which higher taxes does not lead to additional tax revenue because of the decline in economic activity caused by the higher taxes.

The state rankings are determined by three factors: growth in the state's gross domestic product, the number of those who moved to the state minus those who moved out, and the growth in non-farm payroll employment.

The report also ranks the states on their expected future economic growth. These rankings are based upon 15 factors controlled by state lawmakers that, the report argues, have proven over time to influence economic growth. These factors generally include low levels of government spending and low tax rates (especially taxes on economically productive activities). States were also ranked lower if they had a high minimum wage, a high number of public employees, or were not a right-to-work state.

The economic outlook rankings also showed mostly Republican states at the top and mostly Democratic states at the bottom. The top ten states, in order from first to tenth, were: Utah, North Dakota, South Dakota, Wyoming, Virginia, Arizona, Idaho, Georgia, Florida and Mississippi. The bottom ten states, in order from 40 to 50, were Hawaii, Maine, Montana, Connecticut, Oregon, Rhode Island, Minnesota, California, Illinois, New York and Vermont.

The rest of the report, including a summary for your state, can be found here.

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