ARIZONA – Arizona has a strong economy and it will continue to be strong, according to the newly released Rich States, Poor States report from the ALEC-Laffer State Economic Competitive Index.
The report said that Arizona ranked first in the country in economic performance from 2010 to 2020; this was calculated by looking at the state’s domestic migration, non-farm payroll employment, and state gross domestic product. The state also has a highly positive economic outlook rank – meaning the organization thinks the state will continue to have strong economic growth. It ranked third in this category, behind Utah and North Carolina, respectively.
A major reason for that high ranking in the 2022 metric was the state’s recently enacted tax cuts, according to Jonathan Williams, ALEC’s chief economist. “It was a savings for hard-working Arizona taxpayers and I think the legisla-ture and Gov. Ducey should be commended for such a commit-ment to getting tax burdens down in Arizona,” he said.
Last June, Arizona Governor Doug Ducey signed a budget that cut taxes. It will phase in a flat 2.5% state income tax rate, abolishing the state’s previously progressive income tax structure that ranged from 2.59% (for the first $54,000 of revenue) to 4.5% (on income exceeding $327,000). Ducey also cut the tax rate on Arizona small businesses from 3.5% to 2.5% The state’s business climate received negative marks for its higher-than-average minimum wage ($12.80 per hour) and sales tax (5.6%, but as high as 11.2%in some communities), but Williams said the state would still have strong economic growth in the near future. “The southwest region, broadly defined, is one of the most competitive regions in America for economic growth and job creation,” he said. “So Arizona’s move to reduce taxes substantially really cements its position asa competitive state not only regionally, but nationally.”
