Work to be done

May 23, 2013

Today Dr. Arthur B. Laffer, Stephen Moore, Jonathan Williams, and the American Legislative Exchange Council released the sixth edition of Rich States, Poor States: ALEC-Laffer State Economic State Competitiveness Index (RSPS). RSPS is one of the premier analyses of economic performance and economic outlook for the 50 states. Economists agree that policy decisions and indicators highlighted by RSPS provide a very good guide to states on what policies are best and worst for promoting growth in the states.

Last year, Oklahoma Governor Mary Fallin’s foreword in the fifth edition of RSPS outlined how pro-growth policies are having a positive impact in Oklahoma.

Although Oklahoma has made progress over the last decade, this latest edition of RSPS shows Oklahoma has slipped in performance outlook compared to other states and has actually lost ground in the competition for economic freedom between the states. In the RSPS rankings (1=best, 50=worst), Oklahoma disappoints with respect to its personal income tax (21st) and personal income tax progressivity (26th). And we really rank poorly with respect to the number of public employees (34th) and the average workers’ compensation costs (45th).

During the current legislative session, lawmakers finally replaced our broken worker’s compensation system, which will provide a much-needed boost to our economy and employees. But Oklahoma’s delayed, partially contingent tax cut, continued state spending growth, and lack of public-employee reforms are still significant issues that must be addressed if Oklahoma is going to keep pace with the top-performing states.

Competition from other states is fierce. Because of the pro-growth policies being implemented rapidly in Kansas, particularly significant income tax cuts and spending restraint, Kansas’s economic outlook surpassed Oklahoma’s. In addition, Colorado, Kansas, and Texas all have a better economic outlook than Oklahoma. According to RSPS, Oklahoma’s economic outlook has dropped from 14 in 2012 to 19 for 2013. And while Oklahoma performed well, it still was exceeded in economic performance by 11 states.

This latest edition of RSPS reveals that there is much work to be done if Oklahoma wants to become the greatest state for economic opportunity and the state whose residents are most able to enjoy the fruits of their own labor. In order for Oklahoma to achieve number-one status, limited government and lower taxes must continue to be our top priorities.