California Continues Bottom-Dwelling Economic Ranking: Rich States, Poor States in The Orange County Register

The Orange County Register’s John Seiler analyzed the causes for California’s 47th economic outlook ranking in the 17th edition of Rich States, Poor States: ALEC-Laffer State Economic Competitiveness Index.

At least California didn’t place last among the 50 states. It scored only 47th in the new Economic Outlook Ranking of the 17th Edition of Rich States, Poor States: The ALEC-Laffer State Economic Competitiveness Index. In 50th and worst place was New York, followed by Vermont and Illinois. Although this year California dropped from 45th place in 2023.

The index is produced by economists Arthur B. Laffer, Stephen Moore and Jonathan Williams of the American Legislative Exchange Council. Laffer is the well-known co-author of California’s Proposition 13 tax cuts in 1978 and President Reagan’s tax cuts of the 1980s. Laffer and Moore are advising former President Trump on tax cuts should voters grant him a second term.

The Prop. 13 and Reagan tax cuts undergirded California’s phenomenal economic growth through the 1990s. Since then, we’ve suffered a spate of anti-growth actions, such increasing the minimum wage for fast food workers from $16 to $20 on April 1. And boosting the state top income tax rate from 9.3% as recently as 2004 to 14.4% today. Indeed, the state income tax rate for the middle class now staggers at 10.4%, higher than for billionaires 20 years ago.

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To be fair, the ALEC study also provided an Economic Performance Rank, which instead of looking to the future, looks backward at the decade 2012-22. On that, California ranked much better, 21st.

It takes into account three variables: The Golden State’s economic growth rate over that decade was 7th best, at 70.28%. Thank you, Silicon Valley. Non-farm payroll employment rose 19.93%, ranking 12th.

But all those Beach Boy good economic vibrations were weighted down by cumulative domestic net out-migration of 1.8 million (meaning it didn’t include migration from other countries). That ranked 49th, after 50th-ranked New York’s 1.97 million heading out.

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