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Va. slips out of top 10 in economic growth prospects

Tuesday - 4/15/2014, 5:19am  ET

WASHINGTON -- Virginia has slipped from the top 10, and Maryland is ranked 34th out of the 50 states, for economic growth prospects this year, according to economists who rank states based on standards including low taxes and few regulations.

The Arlington, Va.-based American Legislative Exchange Council says Virginia has the nation's 11th best economic outlook among the states this year, falling from 5th place in 2013.

"Virginia lost ground because Virginia had one of the biggest tax increases in the United States last year," says Stephen Moore, economist and co-author of the report "Rich States, Poor States."

Pointing out that Virginia's tax hike was signed into law by former Republican Gov. Bob McDonnell, the authors say their report rates states based on policies, not party labels.

"It's not liberal; it's not conservative; it's not left-wing; it's not right-wing. This stuff is just plain economics," says the report's co-author Arthur Laffer, a former economist in the Reagan administration.

The group, which represents state legislators dedicated to free markets and limited government, cites Maryland for high taxes and labor policies not conducive to business.

While Maryland Democrats say the recently passed bill boosting the state's minimum wage will help stimulate the state's economy, the council economists contend that Maryland is enacting laws that fail to promote economic growth.

"It just doesn't have the right set of policies in place and quite frankly under this governor (Martin O'Malley), Maryland has moved in the wrong direction," says Moore.

The report ranks Utah as the state with the best economic outlook this year. States rounding out the top five include South Dakota, Indiana, North Dakota and Idaho.

The five states that rank at the bottom of the group's list are Minnesota, California, Illinois, Vermont and New York.

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