Companies with states’ economic outlooks high on their list of location criteria will want to take a closer look at Utah. It just claimed first place on the American Legislative Exchange Council’s (ALEC) 18th annual “Rich States, Poor States: ALEC-Laffer State Economic Competitiveness Index” — for the 18th consecutive year. The report is co-authored by Reagan economist Dr. Arthur B. Laffer, policy expert Stephen Moore and ALEC President and Chief Economist Jonathan Williams.
The Index is based on 15 equally weighted state policy variables: highest marginal personal income tax rate, highest marginal corporate income tax rate, personal income tax progressivity, property tax burden, sales tax burden, remaining tax burden, estate or inheritance tax, recently legislated tax changes, debt service as a share of tax revenue, public employees per 10,000 residents, state liability system costs, state minimum wage, workers’ compensation costs, right-to-work status and tax and expenditure limits.
“Each of these factors is influenced directly by state lawmakers through the legislative process,” the report explains. “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.”
“Utah’s consistent top ranking is a testament to the principles that have guided our state for nearly two decades — low taxes, responsible spending and policies that foster innovation and opportunity.”
— Utah Senate President J. Stuart Adams
‘Model for Competitiveness’
ALEC’s April 15th press release announcing the ranking says Utah’s sustained success is no accident: “Utah’s leaders have consistently championed pro-taxpayer reforms, from enacting flat personal and corporate income taxes to eliminating estate and death taxes. Their forward-thinking approach to property tax reform has further cemented Utah’s reputation as a national model for economic competitiveness and opportunity.”
Utah Senate President J. Stuart Adams had this take on his state’s performance on the Index: “Utah’s consistent top ranking is a testament to the principles that have guided our state for nearly two decades —l ow taxes, responsible spending and policies that foster innovation and opportunity. But this isn’t just about rankings; it’s real people and real opportunities. A thriving economy means more jobs, better wages and a higher quality of life for all Utahns.”
“Rich States, Poor States 2025” also includes a 50-state Economic Performance Ranking for 2013 to 2023 based on three variables: state gross domestic product, absolute domestic migration and non-farm payroll employment. Utah places third nationally in that ranking.
Meanwhile, personal finance company WalletHub in April released its 2025 ranking of its Best Small Cities for Starting a Business. Three Utah cities made the top five: St. George places first; Cedar City, third; and Washington, fourth. Midvale weighs in at No. 12. The ranking is based on metrics in three categories: business environment, access to resources and business costs.
Incentives Back Expansions
A post-performance tax reduction awarded by the Governor’s Office of Economic Opportunity is behind several recently announced Beehive State projects. UFP Site Built, a manufacturer of building materials, is using the incentive, part of Utah’s Rural Economic Development Tax Increment Financing program, to invest nearly $66 million in Tooele County, where it will create 75 new jobs. The company is projected to see a 20% tax reduction over 11 years, thanks to the incentive.
For companies locating in more populated areas, Utah’s Economic Development Tax Increment Financing program is often a factor. Coast, a financial services platform for fleet administrators, is investing $10.5 million over the next 20 years to expand in Salt Lake County. It’s forecast to see a 15% EDTIF tax credit over that time.
