He has been a member of the faculty of Southern California noted by Time Magazine is one of the greatest minds. Appearedms work has in many different works. Jonathan is a member of the Advisory Board for the state financial board. Joining us to kick off remarks and share more information about the top trends in the 13th edition is jonathan williams, then arthur laffer, and steve moore. You can ask questions by dropping them into the box at the bottom of your screen. Jonathan, why dont you take it away . Good afternoon, everyone. It is such a pleasure to work with my good friends on this project. Going into our 13th edition that will be released tomorrow. This is been top of mind on how do we exit this covert environment in a way that makes us more prosperous. Have goodarch will comments on that. Art will have good comments on that. Lets get to the top 10 and bottom 10. At the rankings based on 15 factors. Regulation, policy, things that dr. Laffer has looked it over the decades. Also, since there are 70 ranking tools out there these days so many ranking tools out there these days, these are things lawmakers control. Republicans and democrats, united in the idea of free markets and federalism, are looking to make their states more competitive through changing Public Policy such as the things we have identified. These are things they actually work in practice. We have seen Great Results based on some of the states that followed our recommendations over 13 years, becoming economically free, more prosperous, and one of the ultimate measures of are the changes in federal policy such as the limitations of state and local tax reduction that has put pressure on hightech states and driven migration away from states like illinois and california. Accelerate. Trend more people have made tennessee home or places like florida and texas. States that have gotten it right when it comes to Public Policy. One of the things progress always taught us is that all taxes matter for growth. 101,ow that from economics but not all taxes are created equally. Income taxes are the worst kind of taxes the state can raise for growth purposes. It has horrible effects on the growth and that is something we measure every single year in rich states and poor states. It is important in this covert environment. States overly rely on capital based or income taxes they have the biggest revenue volatility. When times are bad states that rely heavily on income taxes have more acute budget problems than states that rely on consumption based tax. Our top 10 in Economic Outlook ratings for 2020, we will start at number one. For 13 years in a row, the state of utah has claimed the number one ranking in Economic Outlook. Story andible an incredible story of outlook success. Stevee turn it over to and art, i would like to get their thoughts as well. One of the things i have picked years and working in utah, they have cap a disciplined approach to budgeting and spending. They have been able to reduce taxes as a result. They on in our publication then governor was able to create a flat tax from a progressive income tax system. In years since they have done some innovative things for state governments such as adopt Pension Reforms to give an option for 401k style contribution accounts. They have done things like innovative property tax reform that has become a model for the truth in taxation model. One of the reasons utah keeps the aaa bond rating is they prepared for the eventuality the federal government may not keep up support to states. Through financial ready they have gone through Contingency Planning to say what can we as utah taxpayers, and the government, need to providing case the federal government does not keep paying 90 medicaid or other things the federal government is sending . A lot of interesting stories. Year, and onethis of the biggest winners, is wyoming living up to number two. Moving up eight spots from last year. Unique in that it is one of two states that does not have a Corporate Income tax. Storya really successful that they have been able to stay competitive. They have some real challenges ahead of them with the Energy Crisis and everything that has happened, but i think they have been smart to avoid those major income taxes. Indiana and North Carolina are two states that, if we went back 10 years, would have been in the middle of the pack in the outlook rankings. Because of dedicated efforts to cut taxes and reform government and do so in a responsible way, like North Carolina has i think they are the Gold Standard for those who have cut taxes responsibly they have moved up to number four and five. Are nevada, florida, tennessee which all have no personal income taxes. Oklahoma has moved into the top 10 in arizona, a long time top state, comes in at number 10. Moving to the bottom 10, before we get to our commentary from arthur and steve, new york is 50 out of 50 for now. I think it was only 49 maybe once in our 13 years of our ranking. Kind of interesting to see the comments from Governor Cuomo begging people to stay in new york. We heard from elected officials new york was a luxury good and they can raise taxes as high as they want and it would have no effects. We have seen the migration outward because of the situation. New york is 50 out of 50, for jersey, new illinois, and california round out the bottom five. I would love to get your take on this in a moment. Those estates at the bottom are the highest spending states, those with the biggest pension liabilities, are also where lawmakers are aggressively lobbying for a federal bailout. We have commented on that is a real danger for taxpayers. Moreover, a real danger for federalism. States need to take care of their problems themselves and not socialize just because we federalize problems does not make them go away. I would like to get your thoughts on that. We have got great rankings here. We have the incredible stories in the top and bottom of the rankings, and a pleasure is all wish to work with arthur and steve on this. I will turn it back to bill and get comments from arthur and steve on this ranking that will go live tomorrow. Thank you, jonathan, for providing insight. Dr. Laffer, would you share your perspective . What surprises me is that washington state, which has no income tax, is 37th which tells you a lot of things matter beside income tax. Utah politically is interesting. Jonathan, jon huntsman came back and wanted to run for governor and was defeated in the primary. He was the governor when he went to be ambassador to china. He turned it over to his lieutenant governor, who was gary herbert at the time, who ran the state beautifully. I think it is really instructive. When you look at the bottom states you see those that have the highest tax rate and they are not phasing out. These states are doubling down. I do not know if you have seen the proposal where a sharp increase in taxes in california, and a big proposal in new york for tax increases, and there is something new york city being very special. It is a treasure for america, but even treasures can be cooked by overtaxing. I think that is what you are seeing. To me it is a continuation of what is going on and i think we are going to get more information in the next couple of years on what we are going to do. I think that will start showing strongly later on because i do not see anyone expecting in 2017 to be passive. I do not know if weve got the irs numbers. They are very powerful and they take two years to come out. Irs numbers are important for the Migration Data as well, especially in new york, california, and connecticut, new jersey, who have had disastrous policies. When i look at all of this it fits very much into what we believe to be true, and i think it fits very much into performance. Day to day, year, you cannot measure them well, but it fits like a glove on a hand now. Fastest canrow the deal with the covid19 problem the best and i will turn it over to steve. Steve has written a great one on ranking the governors. He has done a beautiful job on that as to how they respond to the covid crisis. It is amazing how it fits right in line with the type of economics we are talking about. Steve, i do not see bill anymore. It is your turn. Better up. Steve, you are on mute. Mute steve. Can you hear me . Now we can. I let you better mute. I am just joking. [laughter] writingnk we have been this for 13 or 14 years and it is pretty clear income tax rates do have a very significant negative effect to the growth and prosperity of states. Indisputable at this point. Theere just looking at uhaul data on moving vans and they are showing a continuation of a trend that has been going on for howdy decades . Two or three . Paper and how we flew these guys out to tennessee and rented a uhaul to drive back to california, which is really cheap, and we loaded up my trucks and brought them back out here and returned it. [laughter] we made a killing on it. It is Still Holding up just as well as ever. You are seeing a migration of people out of these high tax states and it is putting a stress on the budgets of these states like new york and connecticut and new jersey. Bled toates are being death the year after year. I will just make a point about my home state, which i love, which is a great state the land of lincoln, illinois which is a catastrophe. It is so mismanaged. They have massive, massive unfunded liabilities in their pension system. By so i studied the other day that they would have to raise i saw a study the other day they would have to raise taxes by 30 for the next 30 years just to pay pension benefits. These states have put themselves in a big hole and one of the things on the ballot this november is what they are illinoishe fair tax in that would double the income tax over 300,000ke or 400,000. That would be catastrophic in my opinion for illinois. The one thing illinois has going for it, the reason it is not in 50th place what were they in . 47 this year. Tothey would probably move 50 if they pass this income tax rate increase. The only thing illinois has going for it is it has a flat income tax and they want to get rid of that. I am hoping and praying that somebody who loves the city of chicago and illinois that that does not happen. There were other initiatives that are going to be imported. Back in your old home, arthur, of california there is an initiative to undo a substantial theion of the back in 1920s you played a big part in this. Get out of here. [laughter] what year was that . Veryne of 1978 and i was involved. Every party opposed us, republicans and democrats, except for one small group which was the electorate. Landslide that changed california for a decade. Over a decade. We went for Property Value below the average to double the u. S. Average. It was amazing prosperity. , but thers of reason amazing prosperity, but the reason i mentioned that is these they want to apply higher property tax rates to commercial real estate. Can you think of a dumber time in the history of United States of putting a higher property tax a commercial real estate . Has anybody in california looked at that . It is in a depression. This would just destroy Office Buildings and office parks. It would be so negative right now for california to do Something Like that. We are hopeful we are going to see more states emulate utah and south dakota and wyoming and i will say one last thing. We are in the middle of an economic crisis that most of us have never seen. Least six or seven states that have already balanced their budget this year. Utah balanced their budget without a tax increase in the middle of a pandemic, south dakota has balanced its budget, nebraska has balanced its budget, iowa has balanced its budget. These states that control their budgets and have sound tax systems do not have massive income taxes. Meanwhile, states like new york and new jersey and connecticut and illinois and pennsylvania and rhode island and california want, at the latest in the bill nancy pelosi proposed to the billion for is 750 states and cities. That is completely unfair to the states like utah and south dakota and north dakota and iowa and idaho and nebraska that have balanced their budgets. We hope that does not happen. Congratulations to alec for another great report. Im happy to take any questions. Tennessee is also doing well and that budget. Nine states with no income tax. That is it. We just got rid of our other income tax. We will no longer have any income tax at all. Questions i go to would like to offer if you think. First, to the journalist on the call, if you have a question put into the webinar chat and we can ask that either live or by reading it for you. Second, for the journalists on the call, please visit the website and pick your state. You can look at the policy variables for this year, but rankings across all 13 years. It provides a great timescale for you to look at the changes up and down. Richstatespoorstates. Org you can change the policy variables in real time. You can change the policies in the state and see how your state would fare if certain policies were changed it is a fantastic tool and gives you a great opportunity to see a what policies should change. First, i would like to go to kevin mooney who has a question for our authors. Go ahead. Caller i would like to ask how pennsylvania compares. In terms of it being the gem of the northeast. Pennsylvania regulated the Energy Sector and has success with natural guest of element. I understand they have their own tax problems in the other issue is Governor Wolf is trying to pull pennsylvania into the Greenhouse Gas initiative. Virginia is looking more like new jersey everyday, sorry to say. What the governor is trying to do is illegal, but in terms of economics we are also talking about science. All pain and no gain in terms of economics and whatever impact it has on the climate. The nearest estimation is where does pennsylvania sit . I am not comparing it to texas or utah. In terms of the neighboring states, i would like to look at some potential. [howling] what was that . That was a very unhappy dog. [laughter] pennsylvania was one of 11 states 1960 that introduced income taxes starting with West Virginia and ending in connecticut in 1991. Ever since that has happened there has been this downward spiral in those 11 states. Of a lot toeck break that spiral. The same thing happened with your home state of illinois and my state of ohio. Anyone else were familiar with current pennsylvania steve disappeared. Jonathan, you are up for grabs. 38th inylvania ranks Economic Outlook this year. When compared to new york and new jersey, fairly well, but certain things definitely stand out in terms of areas for improvement. You have got the issue of pennsylvania having one of the highest business taxes in the United States. That is certainly a big issue that keeps pennsylvanias ranking in an unfortunate spot. Also have the sale of one of the most important factors is the right to work status. It is a right to work state and we have seen this movement throughout the midwest starting in indiana and moving to wisconsin and michigan. Many states in pennsylvanias neighborhood, at least to the west with kentucky and other states, West Virginia, have become right to work states. Talking about the benefits of those policies pennsylvania has not become a right to work state. You have some of the highest business taxes and denied states and you have a recipe which keeps pennsylvania in the bottom tier of the rankings. Factor that is going in pennsylvanias favor is they have a low, flat income tax at the state level. Philadelphia adds more on and that is why you see the range of 7 in rich states, poor states ranking. At a state level it is just over 3 . That is one of the redeeming factors. But there are a lot of things that weigh the ranking down. I will mention two quick things. You mentioned the what do they call it . Regional Greenhouse Gas initiative. I have done some work on that. It has been a catastrophe. Joint . Nsylvania they have not joined because the General Assembly voted to block Governor Wolf. Virginia did. One of the things we have looked at, which is similar to these whichouse gas initiatives are the Renewable Energy standards. They are basically just taxes. They are taxes on the electricity users of the state. The businesses and consumers and we have done analysis of this. We are talking about adding this as one of the variables we are looking at into whether states have renewable resources. Some have as high as 50 me from wind and solar power. On average every state differs. Arizona can use solar power. Illinois cannot, but the point is states that have high Renewable Energy standards have electric power costs that are almost double of what the rates are in states like texas and others that do not have standards. If youe very inadvisable care about your businesses and if you care about your consumers. Finally, we did do an analysis of the governors which will be in the final report. It is not in this report. Whenever coming out without . A month. Just a sneak preview of that, we rank Governor Wolf as the third worst governor in america in terms of his handling of the crisis and lockdown of the economy which has done Severe Damage to the pennsylvania economy. Why would you write energy rig Energy Energy prices in the middle of a pandemic is what i would ask Governor Wolf. Pennsylvania has underperformed in gdp growth and they have underperformed in migration. There are plenty of warnings for pennsylvania to shake up and get things right. Up and get things right. At least it is not cleveland. [laugh