Patrick B. McGuigan
This week, The American Legislative Exchange Council (ALEC) release the fifth edition of “Rich States, Poor States: ALEC-Laffer State Economic Competitiveness Index.” The now-annual study by Dr. Arthur B. Laffer, Stephen Moore, and Jonathan Williams features an introduction by Governor Mary Fallin of Oklahoma.
The purpose of the study, ALEC’s analysts say, is to measure “the competitiveness of state business and tax climates. The publication identifies the policies that have the greatest impact on economic growth, job creation, and interstate migration.”
Reporters were briefed on ALEC’s analysis yesterday in a conference call with authors of the analysis and Indiana state Sen. Jim Buck, chairman of ALEC’s Tax and Fiscal Policy Task Force.
Laffer is a well-known economist and was an author of the income tax phase out proposal under consideration in this year’s legislative session here in Oklahoma. Moore writes for The Wall Street Journal, while Williams works for ALEC’s Center for State Fiscal Reform. Sen. Buck serves as chairman of the ALEC Tax and Fiscal Policy Task Force.
In sum, authors of the ALEC study use these variables to determine the rankings of states:
• Highest Marginal Personal Income Tax Rate
• Highest Marginal Corporate Income Tax Rate
• Personal Income Tax Progressivity
• Property Tax Burden
• Sales Tax Burden
• Tax Burden from All Remaining Taxes • Estate Tax/Inheritance Tax (Yes or No)
• Recently Legislated Tax Policy Changes
• Debt Service as a Share of Tax Revenue
• Public Employees per 1,000 Residents
• Quality of State Legal System
• Workers’ Compensation Costs
• State Minimum Wage
• Right-to-Work State (Yes or No)
• Tax or Expenditure Limits
Governor Mary Fallin wrote an introduction to this year’s ALEC-Laffer analysis. The Sooner State’s chief executive said in the document:
“In 2010, Oklahoma was just starting to climb out of the national recession that cost our state nearly 80,000 jobs. Like people all around the country, many Oklahomans were struggling. Jobs had disappeared in the wake of a financial crisis that was largely out of our control. Tax revenues were down, and the state was facing a budget shortfall of over $500 million.
“It was with that difficult backdrop that I reached out to our state’s legislative leaders to help me build the best, most competitive economic climate possible. We set about reducing government waste and making state government smaller, smarter, and more efficient. Like many times in our state’s history, we rose to the challenge.
“While many other states were raising taxes in order to close their budget gaps — and driving out jobs in the process — we cut our income tax. We provided relief to working families and spurred economic growth in the private sector. As a result, we have seen a net increase of almost 30,000 jobs in the last 12 months, and our job growth rate ranks in the top ten among all states.
Our unemployment rate continues to be one of the lowest in the country at 6.1 percent.
“And in 2011, Oklahoma ranked first in the nation for the growth of manufacturing jobs, which grew five times faster than the national average.
“All of these successes are the results of the kind of common sense, conservative policies outlined by Dr. Art Laffer, Stephen Moore, and Jonathan Williams in ‘Rich States, Poor States.’
“I have been committed to these fundamental principles for years, and we are seeing incredible results because our legislators have had the courage to stand with me in support of conservative governance.
Oklahoma’s economy is outperforming the national economy, and our success stands in stark contrast to the record of dysfunction, failed policies, and outrageous spending that occurs in Washington, D.C.
“Oklahoma could teach Washington a lesson or two about fiscal policy and the proper size and role of government — and so could the tax and fiscal policy reforms espoused by ALEC.
“Our growth as a state stands as a testament to the fact that low taxes, limited government, and fiscal discipline are a recipe for job creation. But our work is not done.
Based on the success we have enjoyed enacting pro-growth policies like those championed by ALEC, our state is moving forward with a bold tax reform plan that will represent the most significant tax cut in state history and chart a course towards the gradual elimination of the state income tax.
It will give Oklahoma one of the lowest overall tax burdens in the entire country, making us a more competitive state for those looking to move jobs here.
“This is the conservative centerpiece of our pro-jobs agenda that will let working families keep more of their hard-earned money and provide a higher quality of life for all Oklahomans.
“My advice to state officials around the country is to get to work enacting these policies, or get ready to help your friends pack as they and their jobs get moving to Oklahoma!”
In other news, Ron Scheberle, Executive Director of ALEC, sent CapitolBeatOK the following statement, describing what he characterized as “a surge of support” in the wake of what his group called an “intimidation campaign” against ALEC members. Scheberle said:
“Over the last 24 hours, ALEC has been inundated with letters of support from elected officials, community leaders and concerned citizens in response to the intimidation campaign launched by a coalition of extreme liberal activists committed to silencing anyone who disagrees with their agenda.
“I am thankful for the support and want to take this opportunity to remind people what we are facing:
“First, the people now attacking ALEC and its members are the same people who have always pushed for big-government solutions. Our support for free markets and limited government stands in stark contrast to their state-dependent utopia. This is not about one piece of legislation. This is an attempt to silence our organization and it has been going on for more than a year.
“Second, ALEC is one of America’s premier ideas laboratories when it comes to advocating free market reforms. We are a target because our opponents believe they have the opportunity to attack an effective, successful organization that promotes free-market, limited government policies that they disagree with. We work to promote the Freedom of Choice in Health Care initiative against ObamaCare’s individual mandate. We support fair tax policies and tort reform. This is an all-out intimidation campaign designed to promote government-based solutions rather than the free-market principles that we have seen work.
“Finally, now more than ever, America needs organizations like ALEC to foster the discussion and debate of policy differences in an open, transparent way and not fall back on bullying, intimidation and threats