West Virginia Record

Tuesday, July 16, 2019

West Virginia drops five spots to 35th in ALEC economic competitiveness survey


By Kyla Asbury | Apr 17, 2019

CHARLESTON — West Virginia dropped five spots on an annual economic competitiveness survey by the American Legislative Exchange Council.

This was the 12th year for the ALEC survey. In the previous seven years, West Virginia was ranked between 30th and 37th. In 2019, West Virginia is ranked 35th overall.

"The Economic Outlook Ranking is a forecast based on a state’s current standing in 15 state policy variables," the survey states. "Each of these factors is influenced directly by state lawmakers through the legislative process. Generally speaking, states that spend less—especially on income transfer programs—and states that tax less—particularly on productive activities such as working or investing—experience higher growth rates than states that tax and spend more."

The top five states on the list overall were Utah—for the 10th year in a row, Idaho, North Dakota, Nevada and Indiana. New York was ranked dead last on the list for the sixth year in a row, with New Jersey, California, Illinois and Vermont right ahead of it. Ohio was ranked 24th and Kentucky was ranked 32nd.

“With massive surpluses gifted to the states through federal tax reform, many state lawmakers are leveraging this into tax relief to benefit state taxpayers," ALEC Chief Economist and Vice President Jonathan Williams said in a press release. "However, some states aren’t seizing their golden opportunity to become more competitive, and their economies will suffer for it."

Williams said this isn’t just an academic report, as it also it tracks the significant interstate migration that occurs every year.

"This migration directly influences the economic and political makeup of states, and the electoral college, as we approach the 2020 census," Williams said. "Americans continue to vote with their feet across states, and they are voting strongly in favor of the states that have created a free market environment conducive to economic growth and opportunity."

West Virginia was ranked 41st in economic performance, which includes state gross domestic product growth, absolute domestic migration cumulative growth and non-farm payroll employment growth.

West Virginia is ranked 16th for property tax burden, 15th for sales tax burden, 46th for remaining tax burden, fourth in average workers' compensation costs and first for being a right-to-work state, which ties it with other right-to-work states in that category. It was also ranked 45th in state liability system, which includes tort litigation treatment and judicial impartiality.

The state was also ranked 29th for state minimum wage, which is $8.75. The federal minimum wage is $7.25.

The ALEC survey says it measures a state’s performance on three important variables: state gross domestic product, absolute domestic migration and non-farm payroll employment, which it notes are all highly influenced by state policy. The survey looks back at 10 years of data.

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