(The Center Square) – A ranking of each state’s competitiveness and economic outlook places Illinois near the bottom.
The American Legislative Exchange Council’s “Rich States, Poor States” report ranked Illinois 47th in the country based on 15 factors, such as income tax rates, property tax burden and debt service as a share of tax revenue.
“Generally speaking, states that spend less, especially on income transfer programs, and states that tax less experience higher growth rates than states that tax and spend more,” according to the report.
Report co-author Arthur Laffer, former economic advisor to President Ronald Reagan, said states that favor low taxes and spending policies came out on top of the list.
“It is just common sense things,” Laffer said. “People don’t work to pay taxes. People work to get what they can after taxes. Those incentives are very powerful.”
Co-author Stephen Moore, former economic advisor to former President Donald Trump, said governors who imposed economic restrictions during the pandemic, like J.B. Pritzker, damaged their state’s economies.
“We have shown pretty conclusively that the lockdowns were a failure and they did not really contain the virus,” Moore said. “They were ineffective, but what they did do is cause high, high unemployment.”
The ALEC ranking mirrors the partisan divide in the country, with red states that have lower income taxes and capped spending faring the best. At the other end of the spectrum are blue states such as Illinois and New York.
The population shift in the country is another factor. Moore pointed to Illinois losing a congressional seat after the latest census count.
“People do leave these places and they are moving away from these states, like Illinois, New York and California,” Moore said. “It’s a tragedy because I’m sitting in Chicago right now and it’s one of the world’s great cities and it is just being ruined by bad policies.”
Utah topped the rankings for the 14th year in a row, followed by Florida and Oklahoma.
“Utah has an incredibly strong track record of pro-taxpayer reforms in recent years, including the adoption of a flat personal income tax rate, pension reform for its previously endangered system and the state’s innovative approach to property tax reform,” ALEC chief economist and co-author Jonathan Williams said.
