Minnesota’s economic outlook among worst in the nation, new report says

Minnesota ranks in the bottom half of states for both economic outlook and performance, according to a new report released this week.

The annual “Rich States, Poor States” report, released by the American Legislative Exchange Council (ALEC), outlines how Minnesota is ranked 29th overall in economic performance, which measures each state on gross domestic product, domestic migration, and non-farm payroll employment over the last 10 years.

Meanwhile, the state was placed 39th overall in ALEC’s forward-looking economic outlook ranking.

“The Economic Outlook Ranking is a forecast based on a state’s current standing in 15 state policy variables. Each of these factors is influenced directly by state lawmakers through the legislative process,” the report says.

Despite some improvement, Minnesota has remained in the bottom tier for years and is weighed down by high income taxes, both personal and corporate, according to the report. Minnesota is among the worst in the nation when it comes to personal income taxes, falling in 45th place, ahead of only Hawaii, New Jersey, California, New York, and Oregon. Eight of the top 10 states have a flat personal income tax or no state income tax at all, ALEC said in a press release.

“Minnesota continues to be ranked in the bottom tier of states for economic outlook because of its refusal to compete on taxes,” ALEC President and Chief Economist Jonathan Williams, a co-author of the report, said in a statement to Alpha News. “Minnesota is 45th in the nation for personal income taxes, 43rd for corporate income taxes, and is one of only 16 states to still levy a death tax.”

One of the few positives in Minnesota’s ranking is the sales tax burden, where the state falls in 13th place with one of the lower sales tax burdens in the nation.

Nationally, Utah was ranked first in economic outlook while New York came in last.

“While the state’s neighbors like South Dakota, North Dakota, and Iowa are competing or moving up in economic opportunities because they have eliminated outdated and costly tax burdens like the death tax, Minnesota continues to fall behind,” Williams added.

Hayley Feland

Hayley Feland previously worked as a journalist with The Minnesota Sun, The Wisconsin Daily Star, and The College Fix. She is a Minnesota native with a passion for politics and journalism.