Utah's rosy economic outlook

There are many reasons to live in Utah. This year's unusually mild June, with daytime highs in the mid-70s and the splendor of snow-laden peaks reflecting the alpenglow of summer sunsets, is certainly one of them.

But one reason that is getting national recognition this week: Utah's superb economic outlook.

Each year, the American Legislative Exchange Council (ALEC) crunches a lot of data on state economic policies related to economic growth. Based on this analysis, ALEC, for the fourth year in a row, will claim that Utah enjoys the best economic outlook in the nation.

Under the guidance of supply-side economists Arthur Laffer, Stephen Moore and Jonathan Williams, ALEC's annual "Rich States, Poor States," will argue when it is formally released on Wednesday, that "it is not a random occurrence that people move from Michigan to Florida or from California to Texas."

According to the authors, migration between the states is a function of supply and demand and they consider economic policy as something states can supply and citizens, voting with their feet, can demand.

ALEC's study also builds on the assumption that there is a strong correlation between the economic policies within the control of the states (state taxation, state debt, state employment policies and state liability system) and economic performance.

That assumed fit between policy and performance isn't one-to-one. Although Utah's economic outlook has been No. 1 for the past several years, Utah's economic performance (as measured by growth in per capita income, domestic in-migration and employment) was 14th in the nation last year.

But that respectable showing was a nice jump from number 18 the previous year. And the only variable where Utah falls short of being solidly in the top ten has to do with per capita personal income growth — a variable affected by Utah's high number of children.

Using 15 different measures of state economic policy, ALEC provides a compilation of policies that match closely with the organization's free enterprise, low tax, deregulatory vision of the world. When crunched together, Utah comes out on top.

Additionally, this year's report includes a shout out for Utah's recent public pension reform (spearheaded by state Sen. Dan Liljenquist, R-Bountiful). The report praises Utah's decision to close its defined-benefit pension plan to new enrollees and provide a defined-contribution plan to new employees. Utah's approach is held up as a model reform to "protect taxpayers from being forced to pick up the tab for the massive unfunded liabilities in many grossly neglected public pension funds."

We know there are more reasons than not for choosing to live and work in Utah. The match between ALEC's supply-side vision of the economy and Utah's own small government inclinations is appropriate. ALEC's recognition is gratifying. Now, we can only hope that their rosy outlook for prosperity is spot-on correct.