Progressive States Network - Questions Raised About ALEC's State Rankings

Fine Print Shows ALEC Uses "Corporate Wish List" to Rate States, Ignoring Middle Class

New York, NY - Today, as the controversial American Legislative Exchange Council (ALEC) releases their annual rankings of outlooks for all 50 state economies, questions are being raised about the criteria used by the shadowy group. A new examination of the criteria used in past "Rich States, Poor States" reports published by ALEC in partnership with the infamous supply-side economist Arthur Laffer reveals rankings that are based on adherence to the policy wishes of huge corporations and that disregard the middle class entirely.

"At a time when the economic security of the middle class is in peril, these rankings based on a corporate wish list of anti-middle class policies could not be more divorced from reality," said Ann Pratt, Executive Director of Progressive States Network. "To ALEC and their CEO friends, a state with a low minimum wage, one in where there are fewer jobs, or one in which millionaires don’t pay their fair share in taxes is considered 'richer' than one which pursues policies that actually ensure the economic security of the middle class. After seven straight months of job losses in the state and local government sector, with teachers, firefighters, and policeman losing their jobs every single day, the criteria used by ALEC to assess states' economic health are not only wrong – they are irresponsible."

ALEC, the publisher of "Rich States, Poor States," is a controversial organization reported to be a venue for allowing corporations to write and pass state legislation that benefits their own bottom lines. In October 2010, reports emerged that ALEC and the Corrections Corporation of America were intimately involved in the writing and passage of Arizona's SB1070 to increase detention rates and benefit the private prison industry.

According to last year’s ALEC-Laffer rankings, the group uses the following criteria to rank a particular states' economic outlook. Many economists have noted that state policies like a fair minimum wage, progressive tax systems, and the right of private businesses to enter into a contract with their employees do not hinder states, but rather help state economies become more prosperous for all.

Criteria Used for ALEC-Laffer "State Economic Outlook" Rankings

(from the Executive Summary of Rich States, Poor States, 3rd ed., American Legislative Exchange Council, 2010)

  • 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
  • State Minimum Wage
  • Workers’ Compensation Costs
  • Right-to-Work State (Yes or No)
  • Tax or Expenditure Limits


About Progressive States Network:

Progressive States Network is a non-partisan, non-profit organization dedicated to supporting the work of progressive state legislators around the country and to the advancement of state policies that deliver on issues the issues that matter to working families: strong wage standards and workplace freedom, balancing work and family responsibilities, health care for all, smart growth and clean energy, tax and budget reform, clean and fair elections, and technology investments to bridge the digital divide.