The American Legislative Exchange Council (ALEC) Economic Outlook Ranking is based on an equally-weighted measure of 15 policy variables. These variables are gathered or estimated in areas that include business tax rates, property tax burdens, sales tax burdens, debt service requirements, a state's legal environment, and other areas.
The ranking is based on work by researchers including Arthur Laffer, Stephen Moore, and Jonathan Williams. Their work leads them to believe that states with lower taxes and lower government spending can grow at higher rates than states with higher taxes and higher government spending.
The ALEC-Laffer State Economic Outlook Rankings, 2021, appear in the 14th edition of Rich States, Poor States, posted May 12, 2021.