Report Highlights States With The Best And Worst Economic Outlook For 2025

A Tuesday report from the American Legislative Exchange Council (ALEC), a conservative nonprofit, highlighted the states with the best and worst economic prospects for 2025.

The 18th edition of ALEC’s “Rich States, Poor States,” an annual report which examines all 50 state’s economic outlook “based on a state’s current standing in 15 state policy variables,” ranked Utah in first place for the 18th year in a row, followed by Tennessee, Indiana, North Carolina and North Dakota. Meanwhile, New York ranked in last place in the “Economic Outlook Ranking.”

New York is notably one of the states with the highest income taxes, which ranges from 4% to 10.9%, according to data from the Tax Foundation, a nonpartisan think tank. Meanwhile, Utah has a flat 4.55% individual income tax rate.

Notably, several of the states that notched high marks on ALEC’s economic scorecard voted for President Donald Trump in the 2024 presidential election by large margins. Trump swept Utah in the November presidential election, securing 59.4% of the vote to former Vice President Kamala Harris’ 37.8%.

Meanwhile, Harris won New York in the 2024 presidential election, notching 56.3% of the vote to Trump’s 43.7%.

Moreover, the report found that states that spend less — especially on income transfer programs — as well as states that tax less — particularly on activities such as working or investing — generally experience higher growth rates than states that tax and spend more.

“This ranking reflects what happens when we trust Utahns to lead, solve problems, and shape their own future,” Republican Utah Gov. Spencer Cox told Deseret News on Tuesday. “By keeping government limited and focused on the essentials, we’ve created the freedom and opportunity for prosperity to take root and grow.”

ALEC’s “Economic Performance Ranking,” which measures a state’s performance over the past ten years based on economic data such as gross domestic product (GDP), absolute domestic migration and non-farm payroll employment, ranked Florida in the top place, followed by Arizona, Utah, Idaho and Nevada.

Meanwhile, Louisiana was listed at the bottom of the Economic Performance Ranking, according to the report. The state also ranked in 18th place for ALEC’s Economic Outlook Ranking.

In February, Louisiana added 2,900 net payroll jobs and the unemployment rate fell by 0.1 percentage point to 4.4%. Louisiana’s GDP reached an estimated $231.3 billion in 2022, according to data from the Louisiana Division of Administration.

Comparatively, Florida added 7,400 net payroll jobs in February, while the unemployment rate rose by 0.1 percentage point to 3.6%. The state’s estimated GDP was $1.58 trillion in 2023, according to a July 2024 report from the Florida Chamber of Commerce.

The report was written by economists Arthur Laffer, Stephen Moore and Jonathan Williams.