Published April 13, 2009
For the second year in a row, South Carolina’s economic outlook ranked 20th nationally, according to a new report from the American Legislative Exchange Council.
The second edition of Rich States, Poor States: ALEC-Laffer State Economic Competitiveness Index provides a roadmap for economic recovery based on state policies that have a proven impact on growth, the council said in a statement.
The American Legislative Exchange Council is a conservative think tank that has counted among its organizers the late conservative activist Paul Weyrich and among its congressional allies the late U.S. Sen. Jesse Helms of North Carolina.
Its Web site presents views of the current federal stimulus legislation that are similar to those of S.C. Gov. Mark Sanford, who has emerged as a leading opponent of the Obama administration’s attempts to soften the economic downturn with government spending. Sanford currently appears in a television ad defending his views that South Carolina should accept only about $700 million of the stimulus if it is used to repay debt.
On the council’s Web site, chairman Bill Howell says, “Our belief is that massive borrowing and spending by the federal treasury is likely to cost taxpayers dearly.”
The council’s analysis suggests a poor tort liability system and high workers’ compensation costs hurt South Carolina’s economic outlook.
“Also of particular concern is the state’s rapid accumulation of debt, which ranks 4th worst nationally,” the report states.
The council’s study lists on the positive side the state’s lack of an estate or inheritance tax, its status as a “right to work” state and its minimum wage, which sits at the federal floor of $6.55. South Carolina ranked sixth for recently legislated tax changes.
Among neighboring states, North Carolina’s economic outlook was fairly comparable, ranking 21st, and Georgia ranked eighth-best nationally. Those states also scored favorably for minimum wage and right to work status.
The study also featured an economic performance ranking, based on a state’s performance in per capita personal income, domestic migration and growth in nonfarm payroll employment. In that ranking, South Carolina was 18th, North Carolina 23rd and Georgia 20th.
“The report shows how federal stimulus dollars may simply encourage out-of-control state spending, which is up 124% over the last 10 years, without requiring states to make the tough decisions needed to bring about financial stability,” the council says.
“States were quick to increase spending and add programs during the good times,” S.C. Sen. Danny Verdin, a member of the council’s Tax and Fiscal Policy Task Force, said in the statement. “Now we need to make tough choices to live within our means. The best solution to our budget woes is to control state spending and promote policies that foster economic growth and job creation.”