(The Center Square) — New York has maintained its place at the bottom of a nationwide ranking on the economic outlook, according to a new report, which faults the Empire State’s high tax burden and rising labor costs.
The American Legislative Exchange Council’s “Rich States Poor States” report, released on Tuesday, ranks states based on “economic outlook” using 15 factors ranging from the burden of its property tax rate, sales tax rate, top marginal income tax rate and top marginal corporate tax rate. New York ranked 29th among all states in economic performance, but 50th in economic outlook.
The state’s $15 per hour wage floor earned it 44th in the nation ranking on state minimum wages, according to the report.
New York has 602 public employees per 100,000 population, which ranks 44h.
The state is ranked 47th in the nation on average workers’ compensation costs, which were estimated at $2.15 for every $100 of payroll costs.
ALEC’s annual ranking also gave New York low marks for having an inheritance or estate tax, and for not having right-to-work legislation on the books.
Despite the negative outlook, New York was ranked 31st in the group’s backward-looking “economic performance” based on three metrics.
For decadal gross domestic product growth, the state ranked 18th at 54.58%. Non-farm employment growth from 2013 to 2022 ranked 27th at 8.28%.
But the Empire State ranked 50th on domestic migration with an estimated loss of more than 1.9 million residents between 2013 and 2022, according to the report.
New York has consistently been ranked rock bottom in economic outlook by the group. Only twice has New York not ranked 50th, both times only reaching 49th, the group said.
Neighboring New Jersey only improved slightly in this year’s ALEC rankings but still placed in the bottom five states, with a 46th in the nation ranking for overall economic outlook.
One bright spot was the expiration of the corporate surtax at the end of 2023 but that may only be short-lived, the report’s authors noted, as the Democratic-controlled state Legislature weighs plans to reimplement the surtax in 2024.
ALEC describes itself as a “nonpartisan, voluntary organization of state legislators and job creators” dedicated to the principles of limited government, free markets and federalism.
The report ranks states on 15 metrics ranging from rates for personal, corporate, property and sales taxes to employer costs, including workers’ compensation and minimum wages.
“Each of these factors is influenced directly by state lawmakers through the legislative process,” the report’s authors noted. “Generally speaking, states that spend less — especially on income transfer programs — and states that tax less — particularly on productive activities such as working or investing — experience higher growth rates than states that tax and spend more.”
