Maine Ranks 42 in Latest ALEC Economic Index


On Wednesday, the American Legislative Exchange Council (ALEC) released the 8th edition of Rich States, Poor States: ALEC-Laffer State Economic Competitiveness Index.

The index ranks all 50 states according to economic performance and economic outlook.  The annual study offers a useful resource for states to compare their policies and see where improvements can be made.

The authors of the study saw Utah as the state with the strongest economic outlook based on the index’s 15 policy variables used to grade states.  New York was ranked dead last.

“States are increasingly realizing the need to become more competitive through fiscal responsibility and free market economic reforms,” said Jonathan Williams, Vice President of the ALEC Center for State Fiscal Reform and co-author of the index. “We anticipate 2015 will be a record year for pro-growth tax reform.”

Maine ranked low on the list; 42nd for economic outlook and 44 for economic performance.

Maine had been slowly climbing up the list since 2011, when it was ranked 48 in economic outlook.  Last year, the state received its highest ranking since the index began, with a rank of 40.  This year, Maine bucked the trend of upwards movement in the rankings, possibly do to the legislature raising the sales tax.

Next year, Maine could rank very differently in the index if Governor Paul R. LePage has his way.  The governor’s budget, if adopted, would set in place sweeping changes to the tax code, cutting the personal income tax drastically and raising the sales tax.  The Governor has made clear his intention to ultimately eliminate the income tax in Maine.  Such reforms could raise Maine’s ranking.

Jonathan Williams, one of the authors of the study and the vice president for State Fiscal Reform at ALEC, will be in Maine next week promoting the study.  The Maine Heritage Policy Center will be hosting an event with Williams on the 16th, where he will speak about the index and what it means for Maine.


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