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New Study Shows Path to Economic Recovery for States


For Immediate Release                                                                                                         Contact: Jorge Amselle

April 14, 2009                                                                                                                                      (202) 742-8536 or



New Study Shows Path to Economic Recovery for States

New York Faces Worst Economic Outlook in America


Washington, D.C.According to a new report from the American Legislative Exchange Council (ALEC), New York’s economic outlook has fallen and is now the worst of any state in America. The second edition of Rich States, Poor States: ALEC-Laffer State Economic Competitiveness Index offers a roadmap for economic recovery based on state policies that have a proven impact on growth. Unfortunately, New York has enacted policies that have made it a “tax purgatory,” according to the authors.


Poor labor policies, high state debt, excessive government bureaucracy, and recently legislated tax increases have combined to devastate New York’s economic outlook. Of particular concern are New York’s punitive tax rates on personal and business income. Sadly, the report provides no consolation, as New York scored poorly on all of the study’s measurements. Years of poor policymaking can help to explain why almost two million residents have fled the EmpireState over the past ten years. Among bordering states, Vermont’s economic outlook ranks 49th, Massachusetts ranks 26th, Connecticut ranks 32nd, New Jersey ranks 46th, and Pennsylvania ranks 42nd.


The report shows how federal stimulus dollars may simply encourage out-of-control state spending, which is up 124 percent over the last 10 years, without requiring states to make the tough decisions needed to bring about financial stability. “States were quick to increase spending and add programs during the good times,” said State Senator Owen Johnson, ALEC’s New York State Chairman. “Now we need to make tough choices to live within our means. The best solution to our budget woes is to control state spending and promote policies that foster economic growth and job creation.”


Co-author and renowned economist Dr. Arthur B. Laffer summarized the report's findings when he said, “States cannot tax their way into prosperity.” Rich States, Poor States presents rankings of the 50 states based on the relationship between policies and performance – revealing which states are best positioned to make a recovery, and which are not.


Laffer and his co-authors, Steve Moore, senior economics writer at The Wall Street Journal, and Jonathan Williams, director of the Tax and Fiscal Policy Task Force for ALEC, analyze how economic competitiveness drives income, population and job growth in the states. They found that, “states with a high and rising tax burden are more likely to suffer through economic decline, while those with lower and falling tax burdens are more likely to enjoy robust economic growth.”


“The top performing states keep taxes, spending, and regulatory burdens low, while the biggest losers in the book tend to share similar policies of high tax rates, unsustainable spending and regulation,” said co-author, Jonathan Williams. “State governments that believe they can bring about economic recovery by growing government and increasing taxes are sadly mistaken.”


TOP FIVE STATES                               BOTTOM FIVE STATES

1. Utah                                                  46. New Jersey

2. Colorado                                            47. Maine

3. Arizona                                             48. Rhode Island

4. Virginia                                              49. Vermont

5. South Dakota                                     50. New York


To read more about the state-to-state comparisons, see the individual state analysis, and view the full report, download it for free at




The American Legislative Exchange Council (ALEC) is the largest individual membership organization of state legislators and the private sector that brings them together as equal partners in the development of free-market model legislation for the states.

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