Utah tops the nation in a ranking of states' economic outlooks.

The rankings released Monday by the American Legislative Exchange Council used 16 state policy variables it says have "a proven impact on the migration of human and investment capital in and out of states."

The 114-page report, titled "Rich States, Poor States: ALEC-Laffer State Economic Competitiveness Index," was compiled by economist Arthur Laffer and Wall Street Journal economics writer Stephen Moore. ALEC is a nonpartisan, individual membership organization of state legislators, with more than 2,400 legislator members from all 50 states, and 86 former members serving in the U.S. Congress.

"The historical evidence is clear: States that keep spending and taxes low exhibit the best economic results, while states that follow the tax-and-spend path lag far behind," the report states.

The outlook ranking was derived from an equal-weighted average of 16 variables. Utah scored highly, in part, by having no estate or inheritance tax, having a state minimum wage that matched the federal floor of $5.85 and being a right-to-work state. It also was in the top 10 in the components of top marginal corporate income-tax rate, personal income-tax progressivity, recent legislated tax changes and a state liability system survey.

"This ranking will help you gauge your state's future based on those 16 factors," the report said of the outlook surveys of the states. "In today's international marketplace this future outlook is critical. The competition for capital and labor is more intense than ever. However, companies looking to invest in the United States face some of the highest tax rates in the industrialized world. The ALEC-Laffer State Economic Competitiveness Index will be extremely valuable for states hoping to attract global investment and to lure domestic and local ventures."

In a prepared statement, ALEC's national chairman, Arkansas State Sen. Steve Faris, said states are competing directly with each other for human capital and business investment.

"State governments that think they can attract jobs and people, and grow their economies, by taxing their citizens at a higher rate than their neighbors are sadly mistaken," he said, adding that the state rankings could be used as a tool to help legislators improve.

Utah was 20th in a ranking of economic performance, which the report described as a state's performance among three variables that are "all highly influenced by state policy." The three criteria used in that ranking were:

• Personal income per capita cumulative growth from 1996 to 2006. Utah's was 49 percent, 31st ranked.