Florida moves to second in new 2021 state economic competitiveness demonstrating a success formula for prosperity after COVID-19

by | May 13, 2021


The latest edition of Rich States, Poor States: The American Legislative Exchange Council (ALEC)-Laffer State Economic Competitiveness Index, released yesterday, finds that even through the pandemic, states, like Florida, with policies such as low- or no-income taxes and worker freedom are more economically competitive and better positioned for wage growth, job creation and domestic in-migration compared to states with higher taxes and government spending.

Florida ranked second overall, in the study, compared to seventh in 2020 and ninth in 2019. Utah remains first, for the fourteenth consecutive year. New York was dead last for the ninth year in a row.

Used by lawmakers across the states since 2007, Rich States, Poor States is authored by Reagan Economist Dr. Arthur B. Laffer, FreedomWorks economist Stephen Moore and ALEC Chief Economist Jonathan Williams for ALEC, the largest nonpartisan, voluntary membership organization of state legislators in the United States. The Council is governed by state legislators who comprise the Board of Directors and is advised by the Private Enterprise Advisory Council, a group of private, foundation and think tank members.

“Following COVID-19, it has become clear that economically competitive states were better prepared for the pandemic,” said author Dr. Arthur B. Laffer. “In fact, states ranked highly in this report have also seen lower rates of unemployment and fewer persistent economic problems post-economic shutdown than uncompetitive, low-ranked states. This publication acts as a guide to the solutions states used to stay resilient, and even prosperous.”

The 15 economic policy variables used by the authors to rank the economic outlook of states have proven over time to be influential for state competitiveness and growth. This report shows that cutting taxes, paying down debt and maintaining free market policies have significantly helped states like Florida, Georgia and Texas improve their national rankings this year.

“The trends highlighted in Rich States, Poor States tell a story of the free-market ideals that win for taxpayers, and the consequences that follow when they’re ignored,” said ALEC CEO Lisa B. Nelson. “Rich States, Poor States economic outlook scores are a leading indicator of what’s to come. For years ALEC has highlighted the bright outlook of low tax states characterized by high scores and increasing population. The new census numbers and the congressional reapportionment to follow confirms Rich States, Poor States findings: People are voting with their feet. They’re headed to opportunity states.”

The trend for 2021 showed almost as many people migrated to Florida as left New York. Florida showed absolute domestic migration of 1,313,236, compared to New York’s -1,448,228.

Two indicators that hurt Florida were the State Liability System Survey and Florida’s Sales Tax Burden. The State Liability System Survey looks at tort litigation treatment, judicial impartiality, etc. Florida ranked 46th in the country. Florida’s Sales Tax Burden per $1,000 of personal income was $30.59, earning Florida a rank of 40th.

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