by Robert Maynard
The American Legislative Exchange Council with its “Rich States, Poor States, 6th Edition” and the news is not good for Vermont. While our current economic performace rated as relatively poor, our future economic outlook is rated as the worst in the country. In other words, things are bad, but they are looking to get worse. Here is a little information on the latest report:
All across the nation, states are looking for ways to boost their economies and become more economically competitive. Each state confronts this task with a set of policy decisions unique to their own situation. However, not all state policies lead to economic prosperity and while some states achieve economic prosperity, others continue to struggle in their efforts to revive their economies.
Fortunately, the United States, with its “50 laboratories of democracy,” provides us with empirical evidence to track exactly which policies lead to economic prosperity and which fail to deliver. Rich States, Poor States is an annual economic competiveness study authored by Dr. Arthur Laffer, Stephen Moore of the Wall Street Journal, and Jonathan Williams, Director of the Tax and Fiscal Policy Task Force at the American Legislative Exchange Council.
Armed with years of economic data and empirical evidence from each state, the authors identify which policies can truly lead a state to economic prosperity. Rich States, Poor States not only identifies these policies but also makes sound research-based conclusions about which states are poised to achieve greater economic prosperity and those that are stuck on the path to a lackluster economy. The economic outlook ranking is a forward-looking measure of how each state can expect to perform economically based on 15 policy areas that have proven, over time, to mean greater economic success.
The question of interest to Vermonters is “How did we fare?” There were two categories that states were rated in. The first was the “Economic Performance Rank” with 1 being the best and 50 being the worst. Here is how the purpose of this ranking was described “A backward-looking measure based on the state’s performance (equal-weighted average) in the three important performance variables shown below. These variables are highly influenced by state policy.” In other words, this is a measure of how we have been doing and how we are doing currently. In this ranking, we rated a 36 out of 50. (To see the scores for performance in specific areas, follow the link above.) While this certainly is not good, it also is not where the real bad news lies.
The second category was the “Economic Outlook Rank”. Here is how the purpose of this ranking was described “A forward-looking forecast based on the state’s standing (equal-weighted average) in the 15 important state policy variables shown below. Data reflect state and local rates and revenues and any effect of federal deductibility.” In other words, this is a measure of our state’s economic future. In this ranking we rated dead last, or 50 out of 50. That, my friends, is the bad news. Unless we change course, our economic future could be quite bleak.