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Throughout the country, states are looking for ways to energize their economies and become more competitive. Each state confronts this task with a set of policy decisions unique to their own situation, but not all state policies lead to economic prosperity.
Using years of economic data and empirical evidence from each state, the authors identify which policies can lead a state to economic prosperity. Rich States, Poor States not only identifies these policies but also makes sound research-based conclusions about which states are poised to achieve greater economic prosperity and those that are stuck on the path to a lackluster economy.
The 2014 economic outlook ranking is a forward-looking measure of how each state can expect to perform economically based on 15 policy areas that have proven, over time, to be the best determinants of economic success.
Rich States, Poor States: ALEC-Laffer State Economic Competitiveness Index is an annual economic competitiveness study authored by economist Dr. Arthur Laffer, Stephen Moore, chief economist at the Heritage Foundation, and Jonathan Williams, Director of the Tax and Fiscal Policy Task Force at the American Legislative Exchange Council.
2014 Rich States, Poor States – Economic Outlook Rankings Map

2014 Economic Outlook Rank Utah South Dakota Indiana North Dakota Idaho North Carolina Arizona Nevada Georgia Wyoming Virginia Michigan Texas Mississippi Kansas Florida Wisconsin Alaska Tennessee Alabama Oklahoma Colorado Ohio Missouri Iowa Arkansas Delaware Massachusetts Louisiana West Virginia South Carolina New Hampshire Pennsylvania Maryland Nebraska Hawaii New Mexico Washington Kentucky Maine Rhode Island Oregon Montana Connecticut New Jersey Minnesota California Illinois Vermont New York

Economic Performance Rank Texas Utah Wyoming North Dakota Montana Washington Nevada Arizona Oklahoma Idaho Alaska North Carolina Oregon Virginia South Dakota Colorado Hawaii West Virginia Florida Nebraska Arkansas South Carolina New Mexico Iowa Tennessee Delaware Georgia Kentucky Louisiana Alabama Maryland Kansas Minnesota New Hampshire New York Vermont Pennsylvania Indiana Mississippi Missouri Massachusetts Maine California Wisconsin Connecticut Illinois Rhode Island New Jersey Ohio Michigan

Historical Rich States, Poor States
6th Edition | 5th Edition | 4th Edition
What Others Are Saying:
“The evidence is clear: Economic prosperity is attainable for those states that exercise discretion and discipline in spending and taxation. Pro-growth tax and fiscal policies—like those championed by ALEC and throughout Rich States, Poor States—set a clear path to a renewed national economic recovery.”       -Governor Rick Perry, Texas
“I am pleased to see Rich States, Poor States in its 6th edition. This edition, like its predecessors, reviews fiscal policies that contribute to economic growth compared to policies that detract from such growth. It has become a go-to source for state policymakers” -Governor Matthew Mead, Wyoming
“As Justice Brandeis noted, one of the happy aspects of the federal system is that a state may serve as a laboratory and try novel policy experiments. In 2012, the ‘Texas Experiment’ of light taxation and regulation produced more jobs than any state, and an economy growing at twice the national state average. Anyone interested in bringing similar success to their state should read this book.” -U.S. Senator Ted Cruz, Texas
“I want to thank the authors of Rich States, Poor States and ALEC for providing policymakers and the public with this valuable resource. There is no question that states like Utah are reaping the benefits of sound fiscal policy. It is clear that limited regulation, low taxes, low debt, and balanced budgets create the best environment for business, investment, and jobs.” -Senate President Wayne Niedershauser, Utah
“It is important for policymakers to have a publication that helps and encourages economic growth and competition between states to encourage economic prosperity. Publications like this one help educate legislators and governors with the tools to understand which policies work and which policies waste taxpayer dollars. The end goal for politicians should be the promotion of liberty, free markets, low taxation, and smaller government.” -U.S. Senator Rand Paul, Kentucky
“Most state legislatures across the country are focused on reducing spending, lowering taxes, and growing their economies. Rich States, Poor States continues to generate in-depth policy information that is critical to making decisions that will move states in a more economically sustainable direction. This publication is an important tool for policymakers, and I find it essential in understanding what makes each state competitive in a global economy.”  -Speaker Thom Tillis, North Carolina
By: Arthur B. Laffer, Stephen Moore and Jonathan Williams (American Legislative Exchange Council)
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The debate over a new level of protection for investors in their dealings with brokers may finally be nearing a resolution. And some investor advocates worry about the direction it seems to be taking.
The debate centers on whether brokers should be required to act in the best interest of their clients when giving personalized investment advice, including recommendations about securities, to retail investors.
The “best interest” standard is known as a fiduciary duty. Financial advisers registered with the Securities and Exchange Commission already are held to this standard. But brokers for the most part are held to a different standard, of “suitability,” which requires them to reasonably believe that any investment recommendation they give is suitable for an investor’s objectives, means and age.
The Dodd-Frank Act, signed into law in 2010, directed the SEC to study the matter, and permits the regulator to establish a fiduciary standard for brokers. In late February, SEC Chairman Mary Jo White said the commission would make a decision by year-end.
Meanwhile, the Labor Department is working on a separate proposal that could establish a fiduciary standard for brokers who give advice on retirement investing. It hopes to offer a proposal by August.
Dangerous Confusion
Advocates of a fiduciary standard for brokers argue that investors don’t understand the current rules. That leaves the door open to abuses bybrokers intent on selling products that pay them a commission, whether those investments are the best option for the buyer or not, these advocates say.

The problem with the suitability standard is that “you can satisfy a suitable recommendation by recommending the worst of what’s suitable,” she says. “If a variable annuity is suitable, you can recommend a variable annuity offered by a shaky insurer with sky-high fees and poor investment choices.”
But applying the fiduciary standard to broker-dealers as it is now applied to investment advisers would add to brokers’ compliance and liability costs, with no certainty of additional protection for investors, says Gary Sanders, vice president of securities and state government relations for the National Association of Insurance and Financial Advisors in Falls Church, Va.
In fact, he says, such a universal fiduciary standard could end up hurting many investors. Lower- and middle-income investors often turn to brokers who are compensated through product commissions, he says, because such clients are less attractive to financial advisers who are compensated based on a percentage of assets under management. Higher costs could prompt some brokers to drop commission-based accounts in favor of more-lucrative accounts that charge a percentage of assets under management, leaving many lower- and middle-income investors without anyone to turn to for investment advice, Mr. Sanders says.
Critics also say a universal fiduciary standard would narrow the range of products brokers could offer, by limiting their ability to recommend investments that earn them a commission.
Plea for Flexibility
At the least, some in the brokerage industry say, any fiduciary standard for brokers should be more flexible than the one investment advisers now operate under.
“The SEC needs to be sensitive that not every relationship is the same and they need to preserve customer choice” by not constricting the range of products brokers can offer, as a standard like the one that now applies to registered investment advisers would, says Ira Hammerman, executive vice president and general counsel of the Securities Industry and Financial Markets Association, the major lobbying group for large broker-dealers.
He says he is also concerned that the Labor Department will act to treat brokers as fiduciaries when they give retirement advice. He says that could jeopardize the sale of commission-based products as retirement investments while permitting fee-based advising. “It becomes very expensive for rank-and-file retail investors,” he says.
But Tim Hauser, deputy assistant secretary for the Labor Department’s Employee Benefits Security Administration, says the department is working on a package of exemptions that would permit advisers to receive many of the forms of compensation they now receive, while also offering protections to make sure conflicts of interest don’t bias the advice they offer.
Some fiduciary-standard advocates are worried that regulators are heading for a middle ground that these advocates fear will fall far short of what’s needed. Those concerns were fueled in March of last year when the SEC issued a public request for data and analysis on the issue. The request set out assumptions and parameters for comment, including the assumption that a fiduciary duty would permit a broker-dealer to continue to receive commissions and compensation for principal trades. Another assumption: The offering of only proprietary products or a limited range of products wouldn’t in and of itself be considered a violation of the fiduciary standard.
The request also said a broker-dealer at least would need “to disclose material conflicts of interest, if any, presented by its compensation structure.”
Not Happy
The SEC said those assumptions and parameters don’t suggest the ultimate direction of any proposed action. Yet critics worry that a fiduciary duty following those parameters wouldn’t offer adequate protection for investors. And some say it would be more confusing for investors than existing standards.
“The concern is that the argument of the [brokerage] industry has been generally accepted,” says Knut Rostad, president of the Institute for the Fiduciary Standard. “If that’s the case, then to proceed, we will have the worst of all possible worlds. We will have a situation where every single broker and adviser will be able to say they’re a fiduciary, when the rule making would essentially be a commercial sales standard with a little bit of extra disclosure requirements.”
Ms. Roper of the Consumer Federation of America says, “If this is what an SEC rule would look like, it would weaken protection for investors and they should not move forward.”
SEC Commissioner Daniel Gallagher fueled worries when he said in March that the commission is concerned that new rules could have the unintended consequence of limiting investor choice, because broker-dealers could scale back full-service brokerage accounts for retail investors. But he also said the topic was “very much an open issue.”
“I haven’t given up hope,” says Ms. Roper.
By: Daisy Maxey (The Wall Street Journal)
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Before the Great Recession, household wealth peaked at $68.8 trillion or $254,600 per person. If that seems like more money than you have, it’s because wealth isn’t evenly distributed. The rich have much more of it than the poor. As a result, back in 2007 the median family had wealth of just $126,000 while the average family had $584,000. Then the recession hit, house prices plunged, stock markets cratered and household wealth hit a low of $56.6 trillion in 2009. Since then stock markets around the world have staged a remarkable recovery and house prices have been steadily recovering. As a result, household wealth now stands at $80.7 trillion, almost $12 trillion more than before the recession. So things have more than recovered, right? Not quite.
Since 2007 there has been inflation and the US population has grown by 20 million people. As a result, inflation-adjusted per capita wealth is now $254,000, just a shade less than it was before the Great Recession. So we are at least back where we were before the recession hit, right? Not so fast. The problem is that the asset price recovery has been profoundly unequal and that has caused the distribution of wealth to change dramatically. And that has huge implications for the economy.
Homeowner equity hit $10 trillion last quarter, and while way up from a low of $6.3 trillion in 2011, it’s nowhere near the pre-recession high of $13.4 trillion. By contrast, equities have soared and are now worth almost $23 billion, way more than their pre-recession high of $18.3 trillion. The economic kicker is that equities are primarily owned by upper-income households, while home equity is the major source of wealth for everybody else. This means that while the rich are roughly $5 trillion wealthier than they were before the recession, all other households are about $3.5 trillion poorer. And while the upper classes spend more when their wealth increases, it’s nothing like the increase in spending that occurs when the rest of the population feels better off.
A huge chunk of middle class spending is the result of tapping into home equity via cash-out refinancing. Regrettably, despite rising home prices many households are still under water, credit remains harder to get than ever before, and many households now have mortgages with extremely low interest rates and are simply unwilling to tap into their home equity. As a result, mortgage equity withdrawal has nearly stopped. After peaking at $320 billion in 2006, it was just $32 billion last year, a decline of almost $300 billion, and that is the highest it’s been since 2010!
In addition to the rich, another group that has done well is older Americans. Families headed by someone under 40 have on average recovered only one-third of their lost wealth, but families headed by someone middle-aged or older have recouped all their losses as more of their wealth is in stock and less in housing. And regrettably the middle-aged and the elderly, like the wealthy, are less likely to spend their capital gains than younger middle class families.
As a result of the profoundly uneven wealth recovery, spending on luxury goods has done very well but firms that rely on middle class spending are not enjoying nearly as much of a renaissance. For that to change wages will have to start rising.
Elliot Eisenberg, Ph.D. is President of GraphsandLaughs, LLC and can be reached at Elliot@graphsandlaughs.net. His daily 70 word economics and policy blog can be seen at econ70.com.
By: Elliot Eisenberg (GraphsandLaughs)
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LAS CRUCES >> Multiple apartment projects broke ground last year and are in various stages of development, but they all are or should be accepting tenants this year.
The Lofts at Alameda
The three-story structure at the corner of Alameda Boulevard and Court Avenue near downtown Las Cruces, looms above surrounding buildings as workers continue their daily construction of The Lofts at Alameda.
When finished, the 38-unit modern apartment complex “will showcase loft-style features such as high ceilings and exposed coiled duct work,” the company reports on its website.
Each unit will have energy-efficient appliances including a washer and dryer. Every loft apartment will have a balcony facing Court Avenue.
One of the owners, John Hummer, said that he expects the complex to open in late summer.
“Based on our in-depth market surveys of potential renters, we are confident that we will be able to lease our 38 units,” Hummer said. “We are a niche product in the rental community. Being downtown, The Lofts are in close proximity, walking distance, for over 4,400 employees who work downtown.”
Rent for one-bedroom apartments starts at $725 per month while rent for two-bedroom units starts at $840.
The website is loftsatalameda.com.
Missions at Sonoma Ranch
Another of the new Las Cruces apartment complexes is near Sonoma Ranch Boulevard is ready to start accepting tenants. Joanne Achen with TND Real Estate Group reports that the Missions at Sonoma Ranch at 1871 El Presidio has 22 units with two already rented, six more available immediately and the other 14 available sometime this week.
All the apartments have two bedrooms and two bathrooms. Ground was broken a year ago on the project and the complex was developed by a group of investors led by James Coles of Coles Communities, LLC.
A grand opening celebration is scheduled for 11 a.m. to 2 p.m. on Saturday with free food and drink.
Coles told the Sun-News during construction that a marketing report conducted for the complex pointed to the fact that two-bedroom facilities was the best way to go.
“What the marketing report said is that three-bedroom apartments were out,” he said. “In order to make this work, you’d have to rent a three-bedroom (units) for $1,250 a month. You can rent a house for that.”
Coles said that the units are 1,000 square feet in size.
“Most two-bedroom apartments are like 820,” he said.
Applications can be made on the website missionsatsonomaranch.com or in person at the property. Office hours of 9 a.m. to 5 p.m. Monday through Friday and 9 a.m. to 1 p.m. Saturday. More information can also be found by calling 575-640-9598. The complex is offering a move-in special of $950 per month with a $500 deposit.
Beverly Heights
Another of the new Las Cruces apartment complexes is under construction on 3 Crosses Avenue, near the 99 Cents store that sits at the corner of 3 Crosses and North Main Street.
Summit Development is building the first phase of Beverly Heights, part of a planned $14 million, 200-unit complex. The first phase includes 40 units in two buildings.
In Phase I, rent for a two-bedroom apartment starts at $700 a month and $810 a month for a three bedroom.
More information can be found online at summitbuildinglc.com. Summit Development can be reached at 575-382-4390.
Sonoma Palms
In addition, the Sonoma Palms Apartment Homes, located at 4260 Northrise Drive, held a ribbon-cutting and grand opening celebration last year.
The facility has multiple buildings open with more on the way.
Depending on floor plan, rent can range from $900 to $1,400 a month.
The phone number is 575-382-5611 and the website is sonomapalms.com.
By: Brook Stockberger (Las Cruces Sun-News)
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