Limited-government group says Utah economy is tops

Utah has again come out on top of a conservative think tank's annual economic competitive index.

The American Legislative Exchange Council, or ALEC, ranked Utah No. 1 for its economic prospects. The ranking marked the fifth consecutive year that Utah led the nation for its mix of tax rates, regulatory burdens and labor policies that ALEC says have the most impact on economic performance.

ALEC's report, authored by economist Arthur Laffer, creator of the Laffer Curve that purports to show the relationship between tax rates and tax revenue collected by governments, also ranked Utah at No. 12 for its economic performance over the past 10 years.

ALEC's membership includes close to 2,000 state legislators and 100 former members of Congress. The lawmakers and corporate representatives draft templates of legislation that can be used by lawmakers and lobbyists as models for state or federal legislation. Recently, several of the nation's most recognizable companies have dropped their affiliation with the group, which has been linked to the spread of Stand Your Ground laws and state efforts to toughen voter identification rules. The group has tried to distance itself from those initiatives.

The rankings are certain to play into Gov. Gary Herbert's campaign against challengers for the gubernatorial nomination. Herbert has made Utah's economic recovery a cornerstone of his re-election message.

In a statement after ALEC released its rankings this week, Herbert said Utah "adhere[s] to correct business principles in a free market economy" that will keep the state at the forefront of the U.S.

"Utah keeps taxes low, limits nonsensical business regulation, offers a well-educated workforce, avoids excessive debt, promotes innovation and is efficient in state government," Herbert said.

His nine challengers from four parties for the post all say they could do a better job running the state.

ALEC, which will stage its national convention in Salt Lake City July 25-28, considered 15 variables in its assessment of the economic prospects of each state. They include top marginal personal and corporate income tax rates, personal income tax progressivity, property and sales tax burdens, debt burden, number of public employees, worker compensation costs and whether a state has a right-to-work law (Utah does).

"These are the kinds of things that legislators obviously impact, and obviously [the focus] of this group is limited government," said Jeff Thredgold, a consulting economist for Zions Bank in Salt Lake City. "Utah is considered to be well-managed. I would agree with that."

Looking back over the past decade, ALEC said:

• Personal per-capita income grew 33.2 percent from 2000 to 2010, enough to rank it No. 27 in the U.S.

• 53,813 people migrated to Utah from 2001 to 2010 for a rank of 17.

• Nonfarm employment grew 11.3 percent from 2000 to 2010, fifth-fastest in the U.S.

pbeebe@sltrib.comTwitter: @sltribpaul —

Top and bottom states

1. Utah

2. South Dakota

3. Virginia

4. Wyoming

5. North Dakota

46. Hawaii

47. Maine

48. Illinois

49. Vermont

50. New York