The Ohio Problem With ALEC’s “Rich States, Poor States” Annual Report

Ohio’s failure on nixing the state income tax and enacting right-to-work renders it a perpetual laggard among the states no matter what ALEC predicts Ohio will do “someday.”

Every year since 2007, the American Legislative Exchange Council (ALEC) has published its “Rich States, Poor States: ALEC-Laffer State Economic Competitiveness Index” report ranking every state using a number of factors. The report contains two key rankings: Economic Performance (how’d we do last year?) and Economic Outlook (how will we do going forward?). It is compiled by Art Laffer of The Laffer Curve/Supply Side Economics, Steve Moore mostly with the Wall Street Journal, and ALEC President Jonathan Williams. It is a noble and ambitious effort.

As you can see above, Ohio gets a top ranking (with other states) for not having an estate tax and a dead last ranking (with other states) for not being a right-to-work state. Ohio gets middling rankings on six other categories and strong rankings on seven other factors. Other than on right-to-work, Ohio doesn’t get a ranking lower than 31st in any other factor. This fact may be why there is a substantial disconnect between ALEC’s ranking of Ohio on Economic Performance and Economic Outlook. And, by substantial, I mean ALEC’s generous “how will we do going forward” Economic Outlook ranking RARELY predicts ALEC’s “how’d we do” Economic Performance ranking. In fact, the average Economic Outlook ranking since 2007 was 27.63 compared to an average Economic Performance ranking of 42.37, which is a nearly 15-point ranking difference. The table below shows this massive disconnect in vivid color.