Arizona falls out of top 10 in state economic outlook rankings

PHOENIX — For the second time in three years, Arizona is out of the top 10 in state economic outlook rankings in the American Legislative Exchange Council’s annual report.

Arizona came in at No. 13 in the Rich States, Poor States variable, down three spots from 2020.

“While we slipped three places in the ranking, are no longer in the top ten and are approaching what could be a crisis of competitiveness, hope still remains that we can correct course,” Chad Heinrich, Arizona state director for the National Federation of Independent Business, said in a press release.

The report used 15 state policy variables to calculate the rankings.

Arizona remained steady in most of the factors, but saw a sharp drop in top marginal personal income tax rate from No. 13 to No. 42.

The variable includes local taxes and any impact of federal deductibility with tax rates as of Jan. 1 in Phoenix, the state’s most populous city.

Arizona hadn’t been below No. 16 in top marginal personal income tax rate in any year since 2008.

The state was in the top third in 10 of the 14 other categories, excluding personal income tax progressivity, state minimum wage, sales tax burden and debt service as a share of tax revenue.

Utah finished as the top state for the 14th consecutive year.

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