A handful of Democrat-dominated states rank at the bottom of economic prosperity and competitiveness as they continue to push progressive policies onto taxpayers.
The American Legislative Exchange Council (ALEC) on Wednesday published the 19th edition of its “Rich States, Poor States” analysis, placing New York, New Jersey, California and Illinois at the bottom of the list. The list ranks states based on 15 “policy variables,” including gross domestic product (GDP), domestic migration and payroll employment.
“We rank the states with 15 equal factors, including taxes and spending and tort systems across the states,” Jonathan Williams, the President and Chief Economist of ALEC, told the Daily Caller News Foundation. “These 15 factors are something all 50 state legislatures can control or change at any time.”
Nine out of the ten states are have Democratic trifectas — meaning that both chambers of the legislature and the governor’s office are all controlled by the party. The only state in the bottom ten that does not a trifecta is deep blue Vermont, whose governor is anti-Trump socially liberal Republican Phil Scott.
New York ranked dead last in the analysis for the 13th year in a row, according to the analysis. ALEC’s 2026 study noted that the state held the second-highest marginal personal and the highest corporate income tax rates at 14.78% and 18.28%, respectively. Elsewhere, the state saw virtually no improvement in property tax or sales tax burdens.
One aspect the study also notes is that New York also ranked at the bottom in absolute domestic migration, losing over 1.5 million residents between 2015 and 2024. The exodus prompted Democratic New York Gov. Kathy Hochul to beg residents who fled to lower-tax states to come back since the “tax base has been eroded.”
California, another Democratic trifecta state, ranked 47th on the list, also holding the third-worst personal income tax rate and the most progressive income tax policy. While the state ranked 25th in economic performance in 2025, around 1.4 million people left over the last decade.
“If there’s anything that ties these ten states, it’s the philosophy of tax, spend, regulate and give to special interests in the name of cronyism,” Williams said. “That’s the approach of states that have bad policies.”
Williams also noted that the net migration losses of the bottom ten states, including New York and California, could see continued budget deficits due to the loss of their tax base and businesses as they flee for red states.
Democratic California Gov. Gavin Newsom, who has been listed as a 2028 presidential candidate hopeful, has repeatedly defended his record as governor, including his economic policies.
“Our poverty rate’s about average. And we’re right up there with Florida, Louisiana, and others with the supplemental poverty rate, which has been the case for 40 years,” the governor told Katie Couric in March.
In contrast, eight out of ten top-performing and economically prosperous states were Republican trifecas, including Florida and Tennessee, which have no personal income tax and the least progressive income tax policies.
Florida, for example, had the best economic performance in 2025 while the state gross domestic product grew 98% over the last decade. Elsewhere in Utah, which has the best economic outlook, found that its GDP had grown over 110% in the same time frame and only had a marginally progressive income tax.
“The states with no personal income taxes spend around 50 to 60% less per person than in states with larger tax rates and larger tax burdens,” Williams told the DCNF.
Williams specifically pointed to Utah, the list’s number one-ranked state, by listing off economic policies that have benefited taxpayers, including a flat tax system and tackling the issue of pensions and unfunded liabilities.
“States fall behind by standing still, and the states at the top don’t fall behind by standing still,” Williams added.
ALEC’s analysis comes as consumers fear skyrocketing gas prices from the ongoing Iran war. Consumer confidence also plunged to a record low in March on continued war fears and anxiety that inflation would increase further.
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