Arizona Ranks First in Economic Performance, Third in Economic Competitiveness

Arizona Ranks First in Economic Performance, Third in Economic Competitiveness

By Corinne Murdock |

Arizona ranked as the top state for economic performance and third for economic competitiveness according to a nationally-renowned, conservative model legislation nonprofit. Those numbers come from the American Legislative Exchange Council’s (ALEC) latest report is their 15th annual “Rich States, Poor States” index on state economies.

State Senate President Pro Tempore Vince Leach (R-Tucson), ALEC Tax and Fiscal Policy Task Force chairman, attributed the ranking to conservative policies. Leach serves as vice chairman of both the Senate Appropriations Committee and Senate Finance Committee.

“While serving as the Vice Chair of both the Senate Appropriations Committee and the Senate Finance Committee, I’ve advocated for fiscally conservative policies focusing on paying off state debt, cutting taxes, and creating an environment competitive for attracting new business and growing a strong workforce, while removing big government red tape that suppresses the economic success and viability of the states,” said Leach.

Arizona’s ranking for economic outlook has varied over the last ten years — 13th in 2021, 10th in 2020, 11th in 2019, 5th in 2018, 8th in 2017, 5th in 2016 and 2015, 7th in 2014, 6th in 2013, and 9th in 2012. The last time Arizona ranked this high was from 2007 to 2010.

ALEC determined their rankings using each state’s current standing in 15 state policy variables. These are the top marginal personal income tax rate, top marginal corporate income tax rate, personal income tax progressivity, property tax burden, sales tax burden, remaining tax burden, estate/inheritance tax levying, recently legislated tax changes, debt service as a share of tax revenue, public employees per 10,000 of population, state liability system survey, state minimum wage, average workers’ compensation costs, right-to-work status, and tax expenditure limits. 

ALEC noted that states with lower expenditures and less taxes generally experienced higher economic growth.

While Arizona climbed upward in the 15 years of the annual ALEC index, the top state didn’t budge. Utah has ranked first in economic competitiveness every year. 

The top ten states on ALEC’s list were as follows, in order: Utah, North Carolina, Arizona, Oklahoma, Idaho, Nevada, Indiana, Florida, North Dakota, and Wyoming.

The middle pack of states, in order of ranking: Texas, South Dakota, Tennessee, Wisconsin, Georgia, Arkansas, Michigan, New Hampshire, Ohio, Louisiana, Alaska, Colorado, Alabama, Virginia, West Virginia, South Carolina, Mississippi, Delaware, Montana, Iowa, Massachusetts, Kentucky, Connecticut, Nebraska, Pennsylvania, New Mexico, Washington, and Rhode Island.

The bottom ten states, in order: Oregon, Maryland, Hawaii, Maine, Illinois, Minnesota, Vermont, California, New Jersey, and New York.

Corinne Murdock is a reporter for AZ Free News. Follow her latest on Twitter, or email tips to

Tax Issues Force Arizona’s Economic Outlook Ranking To Slip

Tax Issues Force Arizona’s Economic Outlook Ranking To Slip

The American Legislative Exchange Council’s latest annual Rich States, Poor States report shows Arizona’s economic outlook ranking is slipping.

Of the 15 variables the report uses for its economic outlook ranking, Arizona received poor grades for its top marginal personal income tax rate (42), state minimum wage rate (44), and sales tax burden (45).

“While we slipped three places in the ranking, are no longer in the top ten, and are approaching what could be a crisis of competitiveness, hope still remains that we can correct course,” said Chad Heinrich, Arizona state director for the National Federation of Independent Business (NFIB).

“To help small businesses the State Legislature must focus on fixing the disparate tax treatment of commercial property, reforming Arizona’s individual income tax code with small businesses in mind, and making our unemployment insurance (UI) trust fund solvent without raising taxes on Main Street enterprises, the latter of which is not measured in the Rich States, Poor States report,” said Heinrich.

The NFIB poll released yesterday showed an increase in small business optimism over the previous month’s increase but keeping the small-business economy from soaring is the drag of record highs in unfilled job openings.

“Gov. Doug Ducey’s signing of liability protection legislation will help Arizona’s small businesses open with confidence as we return to pre-pandemic business operations, as will Arizona conforming with several small-business-focused tax provisions in the federal CARES Act. The two big questions Main Street entrepreneurs have are: Will they be hit with a double whammy if the legislature increases unemployment taxes while UI rates have also increased due to the pandemic and how deeply would a federal effort to raise the minimum-wage rate to $15 an hour affect their operations,” said Heinrich.