Utah has been ranked as the No. 1 state in terms of economic outlook and performance for the 19th year in a row, according to an annual report from the American Legislative Exchange Council evaluating state policies.
The federal Utah House delegation celebrated the findings alongside local leaders in Washington, D.C., on Wednesday as state lawmakers push Congress to adopt some of the Beehive State’s policies on a national level.
“This is a great example of why federalism matters so much,” Rep. Celeste Maloy said. “I’m here in Washington, D.C., representing Utah, but we can see things that the state’s doing that are working for Utahns — and then we can copy a lot of those ideas.”
The annual report considers 15 policy variables to determine the economic outlook of all 50 states, finding that the states that have cut taxes, paid down debt, and maintained free market policies are at the top of the list as they help attract new residents to grow their economy. The list found Utah at the top, followed by Tennessee in the second slot and Idaho in the third.
Utah had an especially high rating because of its “pro-taxpayer reforms in recent years,” the report found, such as the adoption of a flat personal income tax rate, pension reform, and “an innovative approach to property tax reform.”
“The thing that we know works and helps keep Utah’s economy going and flowing and creating those opportunities for our citizens, is a low tax rate,” Utah House Speaker Mike Schultz said on Wednesday. “It almost didn’t happen this year because we didn’t have the revenue that we’ve seen over the last five or six years. But what did we do? We stepped in and we evaluated every dollar spent in the state of Utah, and we were actually able to go in, reduce the inefficiencies, take and reallocate funds to areas where it was more efficient, and freed up additional money to where we could have a tax cut this year.”
That strategy of identifying inefficiencies and tinkering with budgets in creative ways is something the federal government would benefit from emulating, Utah lawmakers say.
Officials with ALEC met with the state’s lawmakers on Wednesday, telling reporters the Beehive State should serve as a “model for the rest of the nation.” Even as the federal economy grapples with inflation and shifting strategies on tariffs, Schultz argued those factors weren’t dragging Utah down because of how the state handles its local economy.
“It’s one of the reasons why we are No. 1 in ‘Rich States, Poor States,’ because we understand the affordability issues,” Schultz said, referring to the title of the ALEC report. “We’ve taken steps to lower housing costs here in the state of Utah, we’ve taken steps to lower gas prices here in the state of Utah, we’ve taken steps to lower childcare, taxes — all the things to make life more affordable.”
Another reason Utah appears to be weathering the national economic storm is because of the communication between state leaders and their constituents, according to Maloy.
“How hard we’re working to grow the economy is part of why Utah is weathering this,” she said in response to a question from the Deseret News. “Because when people feel those impacts, then they don’t panic. And when we’re communicative and we’re telling people what’s happening in the economy, then they don’t have to panic every time they see a headline.”