Vice President for State Fiscal Policy
Almost all states were hit hard by the recession and are recovering very slowly, but a few — most notably Alaska, North Dakota, and Texas – experienced only a mild recession and/or are recovering more rapidly. Do these states’ tax and spending policies explain why they avoided the same economic fate of other states, as some have suggested? Actually no, according to a new analysis by Goldman Sachs.*
What really mattered, the analysis found, were three things:
These factors alone, Goldman Sachs found, account for as much as three-quarters of a state’s relative job performance since December 2007.
In contrast, the study found no relationship between a state’s job performance and its income tax rates, property tax rates, or state spending as a share of the economy.
* “US Daily: State of the States,” August 16, 2011 (available to subscribers only).