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Speaker 1: On this episode of News World. The American Legislative Exchange

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Speaker 1: Council just released the fourteenth edition of Rich States, Poor States,

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Speaker 1: The Alec Laffer State Economic Competitiveness Index, its newest publication

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Speaker 1: in an annual series illustrating each state's competitives and economic

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Speaker 1: outlook using fifteen equally weighted policy variables and trends from

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Speaker 1: past decades. The no edition finds it even through the pandemic,

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Speaker 1: states with policies such as low or no income tax

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Speaker 1: and worker freedom are more economically competitive and better position

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Speaker 1: for wage growth, job creation, and domestic in migration compared

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Speaker 1: to states with higher taxes and higher government spending. The

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Speaker 1: new rankings also reveal that has proven by the new

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Speaker 1: twenty twenty census data, Americans vote with their feet by

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Speaker 1: moving from high tax to low tax states. Here to

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Speaker 1: give a briefing on the latest report, and please to

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Speaker 1: welcome my guest, Jonathan Williams. Jonathan is the chief Economist

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Speaker 1: and Executive vice president of Policy at the American Legislative

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Speaker 1: Exchange Council. We're very fortunate because we have as a

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Speaker 1: guest today Jonathan Williams, who is the chief economist and

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Speaker 1: Executive vice president of policy at the American Legislative Exchange Council.

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Speaker 1: Jonathan founded the ALEX Center for State Fiscal Reform in

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Speaker 1: two eleven, and he's one of the leading experts in

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Speaker 1: the country on the difference between state policies and state outcomes.

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Speaker 1: So it was interesting, particularly appropriate right now because you

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Speaker 1: just had the biggest jump in the core inflation index

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Speaker 1: since nineteen eighty two. You had a dramatic miss on

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Speaker 1: projected new jobs. Instead of about a million, which was

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Speaker 1: the economist projection, they actually only added about sixty six thousand.

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Speaker 1: The series of things going on here that will shape

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Speaker 1: America's future and to me is fascinating. Even with all

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Speaker 1: the empirical evidence that's available about what works and what fails,

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Speaker 1: the American left is deeply committed to failing and adopting

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Speaker 1: policies that failed. Jonathan, were delighted to have you with us.

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Speaker 1: How do you assess the current general situation and then

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Speaker 1: let's talk about specific states and the lessons from them. Well,

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Speaker 1: thank you, mister speaker. It's a pleasure to join you,

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Speaker 1: and I'm really glad. Let me say that you're doing

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Speaker 1: this show. I just had the opportunity to listen to

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Speaker 1: your interview with Scott Walker recently, one of our fine

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Speaker 1: ALEC alumnus members. He was a real reform minded leader

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Speaker 1: and a governor who moved a very difficult state in

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Speaker 1: the right direction tremendously. And I'll tell you what, in general,

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Speaker 1: I'm so optimistic right now, even though I think those

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Speaker 1: of us who believe in pre market ideas like we

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Speaker 1: do at ALEC are discouraged clearly what's happening in Washington

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Speaker 1: with the big government policies and now we're seeing the

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Speaker 1: results of that, and we rack it up the national

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Speaker 1: credit card and now twenty eight trillion plus. We're seeing

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Speaker 1: the inflation numbers, as you mentioned, that are very discouraging.

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Speaker 1: We're hearing discussions about reversing so many of the positive

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Speaker 1: trends from the Trump tax relief, along with so many

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Speaker 1: other things that we'd accomplished in the last several years

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Speaker 1: in Washington. But I remain an optimist because of the

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Speaker 1: concept that you just mentioned, which is a quintessential American

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Speaker 1: concept straight from the founders of these laboratories of competition

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Speaker 1: that were meant to work this way in states, when

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Speaker 1: they compete with each other, it really does create a market.

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Speaker 1: And when anybody competes with each other, whether it's a

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Speaker 1: business when in this case states that we'll talk about today,

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Speaker 1: it's consumers, in this case taxpayers who win. It's freedom

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Speaker 1: that wins. And that's why I remained so optimistic, because

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Speaker 1: we are seeing really some great alts at the state level.

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Speaker 1: And whether you kind of group the big states, even

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Speaker 1: if you take America's four largest states and you compare

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Speaker 1: the philosophy of if it moves taxes, if it keeps

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Speaker 1: moving regulated, if it stops moving, subsidize at the famous

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Speaker 1: line from Reagan, you know, that's the philosophy that's Sacramento

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Speaker 1: in Albany, and big states like California and New York

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Speaker 1: and Illinois have adopted now for years, and it's clearly failing.

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Speaker 1: Because it's not just our opinion here, and mister speaker,

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Speaker 1: it is the actual revealed preferences of Americans as they

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Speaker 1: continue to, as we say, vote with their feet away

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Speaker 1: from these big government, high tax policies and states like that.

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Speaker 1: And where are they going. They're going to states at value,

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Speaker 1: economic competition, free markets, lower taxes, and freedom states like

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Speaker 1: Texas and Florida. To the biggest states of course that

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Speaker 1: go completely without a personal income tax, as you know. Well,

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Speaker 1: so what we're seeing play out in front of us,

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Speaker 1: in front of our eyes every single year, and it's

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Speaker 1: just highlighted and punctuated right now because of the new

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Speaker 1: US census numbers, and of course what's every decade, Washington

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Speaker 1: does essentially pay attention to what's happening at the state

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Speaker 1: level because state legislators will redraw their congressional lines in

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Speaker 1: the US House because of reapportionment and then redistricting, and

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Speaker 1: these census numbers tell exactly this story. Is the states

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Speaker 1: that are gaining population and now gaining political power as

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Speaker 1: a result, like Texas and Florida and so many of

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Speaker 1: the others that we'll talk about are the states that

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Speaker 1: take this free market competition to heart. It is kind

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Speaker 1: of interesting that you have California, Texas, Florida, and New York,

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Speaker 1: which has been an amazing decline for New York over

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Speaker 1: the last half century. So it's hard for people to

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Speaker 1: realize how big New York City was, and how big

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Speaker 1: New York was and the politics of America, say in

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Speaker 1: nineteen forty four when Roosevelt ran for the fourth time,

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Speaker 1: and how much it has shrunk compared to the rest

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Speaker 1: of the country. California course exploded with growth, but it

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Speaker 1: now for the first time is losing a seat because

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Speaker 1: of the census, and Texas and Florida just keep growing.

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Speaker 1: Florida has been amazingly successful at attracting people, maybe to

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Speaker 1: a point where a lot of Native Floridians wonder do

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Speaker 1: we really need all of these people. But you can

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Speaker 1: put those four states together and you have a very

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Speaker 1: clear distinction between what's going on with the sort of

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Speaker 1: the liberal states, the high tax, big government and generally speaking,

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Speaker 1: big government, union states, and what's going on with the entrepreneurial,

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Speaker 1: smaller government, lower tax, much less unionized states. Do you

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Speaker 1: find when you look at all fifty states that that

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Speaker 1: pattern continues to play out? Oh, it absolutely does. I mean,

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Speaker 1: you described that perfectly. This is something that is not

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Speaker 1: a recent phenomenon, and you correctly know you know, New

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Speaker 1: York has been hemorrhaging opportunity and people and businesses as

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Speaker 1: a result for decades. Now, I know you'll appreciate this

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Speaker 1: as a student of history as you go back to

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Speaker 1: let's say, the census nineteen forty and New York remarkably

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Speaker 1: and this would be really surprising to most Americans. New

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Speaker 1: York had forty five representatives in the US Congress in

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Speaker 1: the House, and now they will be down to twenty

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Speaker 1: six after this census, after losing another congressional seat. Just

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Speaker 1: an incredible outmigration. The political loss certainly that represents just

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Speaker 1: the overall and more damaging economic loss to the state

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Speaker 1: of New York over that timeframe. And then the other

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Speaker 1: really huge takeaway that the mainstream media is largely ignored

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Speaker 1: so far is the point that you made, which is,

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Speaker 1: for the very first time since statehood in eighteen fifty,

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Speaker 1: California will lose the US House district because of this outmigration.

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Speaker 1: And these are huge stories. They should be told time

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Speaker 1: and time again, and it will remain to be seen

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Speaker 1: if people connect the dots as to why this is

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Speaker 1: happening in the big government policies. And I think that's

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Speaker 1: why it shows like this are so important for people

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Speaker 1: to kind of go beyond that headline and started ask

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Speaker 1: the questions is what is the common factor here? And

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Speaker 1: of course now Americans are more mobile than ever because

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Speaker 1: of the pandemic, because employers are giving more flexibility around

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Speaker 1: where individuals may work, and that's a great thing for

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Speaker 1: individuals and families, I think, and as a result, I think,

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Speaker 1: if anything, you're going to see an uptick in this

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Speaker 1: migration effect and people leaving high tax states and going

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Speaker 1: to states with more economic opportunity, lower costs of living,

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Speaker 1: and higher quality of living. As a result, I would say,

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Speaker 1: of all fifty states, the one which has surprised me

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Speaker 1: the most with its rate of decay is Illinois. The

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Speaker 1: disaster of their pension funds, the effect of machine politics,

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Speaker 1: and the state capital of Springfield. Have you looked much

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Speaker 1: at Illinois, It seems to me it has declined at

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Speaker 1: a rate faster than most of the other declining states,

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Speaker 1: if that makes any sense a concept it sure has.

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Speaker 1: And being a Midwesterner myself, I'm a Michigan native mister speaker,

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Speaker 1: and so I've watched this closely, and as I often

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Speaker 1: traveled to the Midwest to put together events for our

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Speaker 1: ALEC legislators and their state capitals around rich states, poor states,

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Speaker 1: and our rankings, I often talk about Illinois as their

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Speaker 1: best economic development partner in the states surrounding it, because

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Speaker 1: it absolutely has spun off the individuals and the jobs

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Speaker 1: to so many of the other states in the Midwest.

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Speaker 1: I will say, you know, it could be slightly worse,

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Speaker 1: and that voters I think dodged a major bullet this

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Speaker 1: last November when they rejected the so called progressive income

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Speaker 1: tax that would have dramatically raised the personal income taxes.

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Speaker 1: You know, they've had a flat tax at least in

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Speaker 1: their state constitution since they adopted a personal income tax

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Speaker 1: back in the nineteen sixties, and that has been one

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Speaker 1: of the only redeeming factors of a state that has

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Speaker 1: really gone a muck. And you mentioned one of the

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Speaker 1: biggest problems that they've had is these hundreds of billions

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Speaker 1: of dollars of unfunded public pension liabilities that have completely

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Speaker 1: drained the state coffers. Have caused tax burdens and especially

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Speaker 1: property taxes to go up in Illinois. And then you know,

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Speaker 1: when we talk about the horrible and failed idea of

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Speaker 1: some of the states coming to Washington with their hands

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Speaker 1: out and advocating for a federal bailout, and they kind

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Speaker 1: of danger that presents in terms of the principle of

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Speaker 1: federalism and state autonomy, Illinois is front at the line

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Speaker 1: because they absolutely are going to have an insurmountable issue

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Speaker 1: now because of the influence and the probably outside the

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Speaker 1: influence is safe to say of the public employee unions

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Speaker 1: had driven that state to the really the brink of bankruptcy.

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Speaker 1: And one of the things that a lot of people

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Speaker 1: forget about and how damaging this kind of policy in

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Speaker 1: Illinois has been is it's not just because of the

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Speaker 1: tax burden. It's actually because now at this point, the

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Speaker 1: pension liabilities are so large that just making kind of

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Speaker 1: the minimum payment as you would on a credit card

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Speaker 1: and the like they've done on their pension system for

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Speaker 1: far too long, even that has begun to drain resources

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Speaker 1: away from other core functions of state government, for instance,

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Speaker 1: like roads and bridges and infrastructure, and also even public education.

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Speaker 1: There was a stat that, even if somebody who follows

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Speaker 1: this day and day out me that I saw from

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Speaker 1: the Illinois Policy Institute, that's something like nine of all

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Speaker 1: new dollars going to education statewide in Illinois over the

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Speaker 1: last five years have gone to pay down their pension

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Speaker 1: debt and their pension costs. They don't go to teacher salaries,

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Speaker 1: they don't go to textbooks, all the things that we're

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Speaker 1: told that we need to pay more taxes to fund education.

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Speaker 1: They're not going there in Illinois because they've made these

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Speaker 1: huge mistakes at the behest of the public employee unions,

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Speaker 1: and they've really messed up what would have been otherwise

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Speaker 1: the powerhouse economy. When you look at all this, you're

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Speaker 1: going to have continued to Kay, I don't know if

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Speaker 1: any state of the states that are getting poorer, I

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Speaker 1: don't know if any of them that have actually made there.

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Speaker 1: As you said, I guess you could argue that Scott

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Speaker 1: Walker and Wisconsin genuinely changed the state in a way

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Speaker 1: that was pretty remarkable and was a real war. I mean,

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Speaker 1: there were people occupying the capitol for months, which didn't

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Speaker 1: seem to bother the national media, and there were actually

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Speaker 1: death threats to Scott and his family. But with the

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Speaker 1: exception of Wisconsin, do you know of any of these

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Speaker 1: states that has moved away from a high tax, big

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Speaker 1: unionized bureaucracy model or are they stuck there even as

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Speaker 1: they decay. Well, I'll tell you my home state, Michigan

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Speaker 1: had done some really incredible things over the last decade

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Speaker 1: because of really our single state recession from the economic

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Speaker 1: downturn in two thousand and one, because of the nine

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Speaker 1: to eleven tragedy and the resulting downturn all the way

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Speaker 1: to two ten. As the rest of America recovered pre

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Speaker 1: financial crisis, Michigan had double digit unemployment that entire decade

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Speaker 1: under Jennifer Graham and her failed policies of high taxes

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Speaker 1: and big government. And of course she was very big

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Speaker 1: into both public and private sectory unionism across Michigan. And

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Speaker 1: in twenty ten, as many of our graduates from University

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Speaker 1: of Michigan and other fine institutions we're leaving to go

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Speaker 1: to Texas, we were educating the workforce of Texas, in Florida,

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Speaker 1: in Tennessee, in the states that just get it right.

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Speaker 1: And we saw so much of this outmigration that, of course,

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Speaker 1: had a different leadership be elected in two and ten,

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Speaker 1: you had Governor Rick Snyder come in and replaced Jennifer

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Speaker 1: Granholm in the Governor's mansion, you had new free market

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Speaker 1: conservative majorities in both houses of the legislature, and they said,

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Speaker 1: enough is enough. The definition of insanity has continue to

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Speaker 1: do what you've always done and having it fail over

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Speaker 1: and over. And that was what the Michigan scenario would

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Speaker 1: have been. With the autos that had been outsourced in

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Speaker 1: many cases because of bad federal policies as well, and

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Speaker 1: because of global dynamics, as you know well knew. But

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Speaker 1: then Michigan did turn it around. We became a right

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Speaker 1: to work state, We cut business and personal taxes, and

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Speaker 1: Michigan has become dramatically more competitive as a result, and

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Speaker 1: we've actually seen in migration and job growth that would

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Speaker 1: have been unthinkable. Thank you to the Trump tax reformed

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Speaker 1: by the way for reducing business taxes federally. That really

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Speaker 1: put Michigan back in the game for a lot of

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Speaker 1: that manufacturing. But we've actually had a scenario now where

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Speaker 1: we've had manufacturing be in source to Michigan from Mexico

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Speaker 1: because of the federal change in policies and because Michigan

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Speaker 1: becoming a right to work state and lowering taxes. So

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Speaker 1: it can be done. And I think Michigan's a perfect

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Speaker 1: example of that. And yet despite all that, you may

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Speaker 1: have one of the two or three worst governors in

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Speaker 1: the country. We do we regressed. Unfortunately, you know, we

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Speaker 1: had a very good eight year run there with Governor

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Speaker 1: Snyder and conservatives in the legislature, and unfortunately twenty eighteen

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Speaker 1: was a very bad year for conservatives in Michigan. As

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Speaker 1: it was in many states, and so you know, maybe

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Speaker 1: this will be a short term Bliplet's hope on the

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Speaker 1: radar nude as you develop your rankings and you actually

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Speaker 1: go through and sort of share from best to worse,

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Speaker 1: well us through what are you evaluating in a state

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Speaker 1: to build its ranking? Great question in our Rich States

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Speaker 1: Poor States index now that we've had for fourteen years,

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Speaker 1: we've kept a consistent time series, which we thought has

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Speaker 1: been important so you can compare apples to apples year

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Speaker 1: over year and actually check progress or lack of progress,

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Speaker 1: as we've been talking about. But these are variables that

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Speaker 1: my co author Art laugh Or, your friend, and Stephen

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Speaker 1: Moore developed with us now for a period of decades

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Speaker 1: that they've tracked and we look at fifteen different things

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Speaker 1: public policy choices that we equally wait everything in the

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Speaker 1: broad categories taxes and regulation and labor policy. While it

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Speaker 1: could be truly said that you could choose a thousand

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Speaker 1: variables that matter for why some states grow in some

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Speaker 1: states don't, we really focused on these fifteen for a

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Speaker 1: couple of reasons, and that one we know based on

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Speaker 1: the theory and the practice, that's either some of the

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Speaker 1: most important things that differentiate a state competitiveness versus another state,

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Speaker 1: and tax rates and right to work status, whether state

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Speaker 1: has a death tax, and what the cost of workers'

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Speaker 1: compensation or minimum wages for instance, or some of the variables.

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Speaker 1: And then just as importantly though, because there's just so

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Speaker 1: many indicies out there and how you know, this inherent

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Speaker 1: ranking of states gets a lot of good media attention,

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Speaker 1: so lots of groups have jumped into this fray. Unfortunately,

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Speaker 1: some of the other rankings that you see out there

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Speaker 1: are things that measure weather and other things that state legislators,

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Speaker 1: let's say, have very little or zero control over in

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Speaker 1: their state capital. And so we concentrate on actual public

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Speaker 1: policy choices that the men and women who serve in America,

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Speaker 1: state legislators can directly control and change on a pretty

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Speaker 1: short turnaround if they look to make their state more competitive.

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Speaker 1: For instance, if you look at states that are more competitive,

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Speaker 1: you indicate in your analysis that Utah has been at

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Speaker 1: the top of the ratings in every single edition. That's

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Speaker 1: exactly right, and it's an incredible accomplishment. You know, fourteen

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Speaker 1: years at the top, when it's a competitive group at

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Speaker 1: that top place there and Utah at so many things. Right,

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Speaker 1: ALEC national chairman for twenty twenty one is the Senate

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Speaker 1: President Stuart Adams, and he tells the story I think

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Speaker 1: very well in that you know, Utah they aren't necessarily

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Speaker 1: the flashiest to let's say, they still have an income tax,

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Speaker 1: and they have other factors that maybe other states do

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Speaker 1: slightly better than Utah. However, they've been very consistent and

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Speaker 1: prudent in terms of overall governance, keeping spending limited if

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Speaker 1: they have a budget shorepfall. Let's say, like many states

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Speaker 1: were afraid in the last year with the unprecedented nature

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Speaker 1: of the lockdowns in many cases in the contraction of

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Speaker 1: the economy, we were all thinking, you know, that could

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Speaker 1: be very acute. Well, Utah did not go back to

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Speaker 1: the taxpayers like many inclinations of those governors in the

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Speaker 1: high tax states, with like Andrew Cuomo and Phil Murphy

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Speaker 1: in New York and New Jersey for instance. You know,

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Speaker 1: Utah always tries to live within their means, and I

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Speaker 1: think they've proved that out. But a couple of the

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Speaker 1: innovative things that I think they've been way ahead of

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Speaker 1: the curve on some of the public policy choices that

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Speaker 1: many states would be wise to see. And this is

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Speaker 1: the issue we just talked about in Illinois, for instance,

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Speaker 1: about a decade ago, when many states still thought their

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Speaker 1: pension funds had no problems and that this failed kind

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Speaker 1: of old school to find benefit model that only exists

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Speaker 1: for public employee unions now today as the private sector

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Speaker 1: several decades ago has moved to the four oh one

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Speaker 1: K flexible model for young employees. Let's say Utah got

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Speaker 1: ahead of that curve a decade ago in transition new

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Speaker 1: employees to more of a hybrid four one K style

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Speaker 1: model that has really saved the state billions in unfunded

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Speaker 1: liabilities that would have otherwise accruved. And so that's just

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Speaker 1: one example. Another one which I think is really important too,

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Speaker 1: is this issue of property taxes. One of the most

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Speaker 1: hated taxes in America. But Utah now for thirty years,

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Speaker 1: has it on their books in a way that has

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Speaker 1: limited property taxes by really putting taxpayers in charge to

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Speaker 1: say local units of government if you want to take

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Speaker 1: more property tax collections and rising house values. Right now,

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Speaker 1: a lot of the big issues new is that local

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Speaker 1: governments love to take the assessment increases and they are

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Speaker 1: not very honest about it sometimes and that they take

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Speaker 1: the collections. They tell you they've just reduced your property taxes.

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Speaker 1: But you're wondering why you paid more this year than

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Speaker 1: you did last year. It's because the assessments of your

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Speaker 1: house went up more than the rate went down. So

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Speaker 1: to get to the heart of that property tax game,

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Speaker 1: Utah has now said, local units of government, if you

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Speaker 1: want to take more property taxes from your taxpayers, you

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Speaker 1: need to notify every single property tax owner in that district.

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Speaker 1: You need to have a public hearing, and local units

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Speaker 1: of government you need to take a recorded vote if

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Speaker 1: you want to take more of their property tax money. So,

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Speaker 1: as we've seen property tax bills escalate pretty dramatically in

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Speaker 1: many states across America, they've actually fallen in Utah. So

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Speaker 1: those are a couple of just the big examples, but

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Speaker 1: there's so many of the things that Utah has done

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Speaker 1: right to stay at number one now for fourteen years

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Speaker 1: in a row. So if they had sort of a

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Speaker 1: cultural agreement in the legislature, that just has formed a

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Speaker 1: pattern that they don't break out of, sort of the

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Speaker 1: opposite of California. I think that's right, and it's a

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Speaker 1: state that leaders come and go and they take it

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Speaker 1: as a citizen legislature, and there's no term limits there,

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Speaker 1: for instance, But they have a culture of only serving

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Speaker 1: a few terms in leadership and then passing the baton

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Speaker 1: on to the next leader. And we've had some great

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Speaker 1: ones over the years that I've had the pleasure to

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Speaker 1: work with and have been very involved with ALEC. But

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Speaker 1: you know, their culture has been exactly that we don't

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Speaker 1: spend more than we have, we live within our means,

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Speaker 1: we're prudent with our finances, and we think innovatively about

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Speaker 1: some of these problems that have really vexed so many

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Speaker 1: of the states that have gone in a different direction.

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Speaker 1: This whole concept of truth and taxation seems to be

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Speaker 1: gradually spreading. And I noticed that Governor Kelly in Kansas

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Speaker 1: veto did last year but then signed it into law.

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Speaker 1: What changed, That's a great question. I think this is

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Speaker 1: really the gold standard of property tax reforms, based on

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Speaker 1: that Utah model that we were talking about. In Kansas.

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Speaker 1: Democrat Governor Laura Kelly did veto this bill last year.

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Speaker 1: It was the COVID shortened session, so I think she

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Speaker 1: realized that the legislature was not going to come back

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Speaker 1: and be able to override a veto, and then the

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Speaker 1: margins even increased more this year, where there was only

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Speaker 1: a handful of votes mister Speaker in both chambers in Kansas.

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Speaker 1: So you had conservative and moderate Republicans as well as

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Speaker 1: many liberal Democrats voting for this concept of accountability and

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Speaker 1: transparency for property taxes. And I think she saw the

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Speaker 1: writing on the wall that quite frankly, her veto would

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Speaker 1: have been overridden this year and she would have looked

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Speaker 1: very bad. This is a very popular reform. People hate

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Speaker 1: property taxes, and for good reason, because they're very transparent.

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Speaker 1: You know, you've cut that check. You realize the cost

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Speaker 1: of local government and this is a way to get

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Speaker 1: at that cost. And I think she realized that there

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Speaker 1: would be massive political consequences if she vetoed it. And

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Speaker 1: let's not forget she's up for reelection in twenty twenty

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Speaker 1: two and a very conservative state for a Democrat to

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Speaker 1: hold office, So I think there had to be a

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Speaker 1: little bit of a political calculus there. From that perspective,

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Speaker 1: how many states are there that should adopt it that

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Speaker 1: have not yet adopted it? Well, that's a good point,

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Speaker 1: and there's only several states that have adopted. It started

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Speaker 1: in Utah in Tennessee and then just spread to Kansas.

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Speaker 1: Right now, Actually, are the senators in Lincoln, Nebraska are

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Speaker 1: considering this, and I know Governor Ricketts is very excited

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Speaker 1: to potentially sign it into LAUDE in Nebraska this year.

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Speaker 1: But that gives a pretty wide playing field for other

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Speaker 1: states that need to be thinking about this. You know,

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Speaker 1: ALEC has always had a very innovative approach. I've been

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Speaker 1: working with ALEC, I think since maybe nineteen eighty one,

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Speaker 1: and very often through ALEC meetings and ALOC activities, good

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Speaker 1: ideas spread from one state to another to another and

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Speaker 1: then become kind of a national pattern. So should those

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Speaker 1: of us who care about better government be urging representatives

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Speaker 1: in all of the other states to pass a bill

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Speaker 1: similar to the Utah bill, And as the Utah bill

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Speaker 1: basically about the same as the Kansas bill, it's pretty similar.

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Speaker 1: And now it is ALEC model legislation as well. And

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Speaker 1: this is something as you note correctly that ALEC now

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Speaker 1: has about nine hundred different model pieces of policy on

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Speaker 1: its website that we look at best practices and pre

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Speaker 1: market government, and this is one of those that we're

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Speaker 1: very proud of. And we just adopted it a couple

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Speaker 1: of years ago, very close to the Kansas and the

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Speaker 1: Utah model. And so it's something I think would be

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Speaker 1: hugely beneficial for other states to address, because if you

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Speaker 1: don't address this properly, then you run into the problem

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Speaker 1: of what's happened in the states that have allowed property

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Speaker 1: taxes to get onto control, and it leads to this outmigration.

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Speaker 1: And this isn't just individual residential property. This is business

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Speaker 1: property as well, and so for small businesses, this is

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Speaker 1: a big deal in terms of where to invest in

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Speaker 1: a state. And let me just say, if you make

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Speaker 1: the mistake of not doing it right on property taxes,

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Speaker 1: this has actually been one of the reasons why let's say,

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Speaker 1: if you look fifty years back, you had instead of

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00:24:13,480 --> 00:24:16,399
Speaker 1: nine states without a personal income tax like we have today,

435
00:24:16,440 --> 00:24:18,119
Speaker 1: which is one of the best things a state can do,

436
00:24:18,359 --> 00:24:20,639
Speaker 1: be more like Texas and Florida and Tennessee and not

437
00:24:20,760 --> 00:24:24,359
Speaker 1: tax personal income. Fifty years ago, we had twenty states

438
00:24:24,480 --> 00:24:27,359
Speaker 1: roughly that did not have a personal income tax, and

439
00:24:27,520 --> 00:24:30,439
Speaker 1: almost to a state, why they adopted a personal income

440
00:24:30,480 --> 00:24:34,120
Speaker 1: tax was to try to buy down local property taxes

441
00:24:34,200 --> 00:24:37,600
Speaker 1: because local governments were probably run by progressives. Then in

442
00:24:37,640 --> 00:24:41,120
Speaker 1: many cases they overspent, they overtaxed, and then they came

443
00:24:41,160 --> 00:24:43,280
Speaker 1: to the state level in a way to socialize out

444
00:24:43,280 --> 00:24:46,320
Speaker 1: their big spending ways and ask for a state dollars

445
00:24:46,359 --> 00:24:49,280
Speaker 1: to buy down their local property tax burdens. And that's

446
00:24:49,280 --> 00:24:51,639
Speaker 1: how you had states like New Jersey and Nebraska and

447
00:24:51,760 --> 00:24:54,880
Speaker 1: Michigan and other states adopt income taxes because they were

448
00:24:54,880 --> 00:24:57,760
Speaker 1: looking to really correct this issue of local property taxes,

449
00:24:57,760 --> 00:25:00,359
Speaker 1: they just went about it the wrong way and monically.

450
00:25:00,440 --> 00:25:03,199
Speaker 1: Fast forward to today, you have states like New Jersey

451
00:25:03,280 --> 00:25:06,240
Speaker 1: that have high income some of the highest income, highest

452
00:25:06,240 --> 00:25:09,400
Speaker 1: sales tax in the country, and since they didn't really

453
00:25:09,600 --> 00:25:13,240
Speaker 1: cap local government spending in this property tax problem, they

454
00:25:13,280 --> 00:25:16,080
Speaker 1: still have some of the very highest property taxes today.

455
00:25:16,680 --> 00:25:20,640
Speaker 1: Have you seen any polling one the Truth and Taxation Act. Yeah,

456
00:25:20,640 --> 00:25:23,680
Speaker 1: I believe our friends at the Kansas Policy Institute, a

457
00:25:23,680 --> 00:25:26,320
Speaker 1: great partner of ours that helped with this in Kansas,

458
00:25:26,320 --> 00:25:28,840
Speaker 1: have done some polling and it was very strong because

459
00:25:29,160 --> 00:25:31,720
Speaker 1: it makes sense because you look at the most unpopular

460
00:25:31,800 --> 00:25:36,400
Speaker 1: forms of taxes out there, and it's almost always gasoline taxes,

461
00:25:36,920 --> 00:25:39,600
Speaker 1: is almost always property taxes, and then the death tax.

462
00:25:39,680 --> 00:25:42,840
Speaker 1: Those are generally in public polling always the three most

463
00:25:42,840 --> 00:25:46,320
Speaker 1: hated taxes, and so anything to solve those kind of

464
00:25:46,359 --> 00:25:49,120
Speaker 1: tax issues, and I think we'll pull very well. Let

465
00:25:49,160 --> 00:25:52,639
Speaker 1: me ask you one of the things, which is you

466
00:25:52,800 --> 00:25:55,679
Speaker 1: see patterns here. I mean you could almost have like

467
00:25:55,720 --> 00:25:58,720
Speaker 1: an up arrow in a down arrow, and you could

468
00:25:59,119 --> 00:26:01,600
Speaker 1: list of the series of things you do if you

469
00:26:01,600 --> 00:26:03,879
Speaker 1: want to go down, and then list a series of

470
00:26:03,920 --> 00:26:05,760
Speaker 1: things you do if you want to go up, and

471
00:26:05,920 --> 00:26:08,640
Speaker 1: actually have a chart that says, here's a good way

472
00:26:08,640 --> 00:26:11,800
Speaker 1: to measure how dumb your political system is. I've thought

473
00:26:11,800 --> 00:26:14,680
Speaker 1: about writing a paper or a book that basically says,

474
00:26:14,720 --> 00:26:18,119
Speaker 1: what did you think was going to happen where you

475
00:26:18,160 --> 00:26:20,679
Speaker 1: look at? Why don't you raise taxes enough that everybody

476
00:26:20,800 --> 00:26:23,480
Speaker 1: leaves the state? Gee, I wonder why people are leaving

477
00:26:23,480 --> 00:26:29,159
Speaker 1: the state. Or I know Juliani's anti crime system worked,

478
00:26:29,359 --> 00:26:32,240
Speaker 1: but I'm bored by it and it has too many cops.

479
00:26:32,680 --> 00:26:35,439
Speaker 1: So why don't I go back to what Dinkins was

480
00:26:35,480 --> 00:26:39,280
Speaker 1: doing so badly and adopt every little stupid liberal idea?

481
00:26:39,480 --> 00:26:42,560
Speaker 1: And then, oh, we just had had two hundred percent

482
00:26:42,680 --> 00:26:46,080
Speaker 1: increase in shootings in New York in a year. Gosh,

483
00:26:46,119 --> 00:26:48,840
Speaker 1: I wonder why that happened. I suspect you could do

484
00:26:48,880 --> 00:26:51,439
Speaker 1: a little book when I wonder why that happened, and

485
00:26:51,520 --> 00:26:54,040
Speaker 1: just the stuff you already know from going around the country,

486
00:26:54,359 --> 00:26:57,040
Speaker 1: it would be amazing. It's just sort of a voters

487
00:26:57,080 --> 00:27:01,040
Speaker 1: guide to really stupid politicians. I love the idea. It

488
00:27:01,080 --> 00:27:03,600
Speaker 1: sounds like we've found a partnership idea for a book there,

489
00:27:03,680 --> 00:27:06,080
Speaker 1: mister speaker, and I think it's a great one. I'll

490
00:27:06,119 --> 00:27:08,720
Speaker 1: tell it, if you'll write it, we'll do the podcast,

491
00:27:08,720 --> 00:27:11,040
Speaker 1: and we'll help publicize it. That's a deal. If arn't

492
00:27:11,080 --> 00:27:13,760
Speaker 1: Laugher likes to say, it's not rocket surgery. This is

493
00:27:13,800 --> 00:27:17,280
Speaker 1: basic kind of common sense economics. And when you become

494
00:27:17,359 --> 00:27:20,680
Speaker 1: less competitive, don't be surprised when businesses and individuals leave.

495
00:27:20,720 --> 00:27:23,080
Speaker 1: And when you become more competitive, you're going to see

496
00:27:23,080 --> 00:27:25,280
Speaker 1: the other side of that equation. So let me ask

497
00:27:25,280 --> 00:27:28,080
Speaker 1: you about one last thing, which is share with people

498
00:27:28,840 --> 00:27:32,439
Speaker 1: what ALEC, the American Legistive Exchange Council, What does it

499
00:27:32,560 --> 00:27:36,400
Speaker 1: really do and why is it so important to the

500
00:27:36,440 --> 00:27:40,040
Speaker 1: future of healthy policy in America. Well, ALEC is really

501
00:27:40,040 --> 00:27:42,200
Speaker 1: a one of a kind organization, as you know. Well,

502
00:27:42,240 --> 00:27:46,000
Speaker 1: we're going on fifty years of being here and standing

503
00:27:46,040 --> 00:27:49,280
Speaker 1: for the key American principles of free markets, limited government,

504
00:27:49,320 --> 00:27:52,080
Speaker 1: and federalism. And in fact you may not remember this,

505
00:27:52,160 --> 00:27:54,520
Speaker 1: I actually met you at my very first ALEC meeting

506
00:27:54,880 --> 00:27:57,320
Speaker 1: a nearly fifteen years ago when I came on staff,

507
00:27:57,400 --> 00:27:59,640
Speaker 1: and I've been a long timer because I believe so

508
00:27:59,680 --> 00:28:03,520
Speaker 1: strongly in this mission, and that is we reach state legislators,

509
00:28:03,840 --> 00:28:07,080
Speaker 1: these people who are the innovators and these laboratories of democracy,

510
00:28:07,600 --> 00:28:10,639
Speaker 1: and we work with them to talk about best practices,

511
00:28:10,680 --> 00:28:13,720
Speaker 1: to develop both the original research and the thought leadership

512
00:28:13,720 --> 00:28:15,960
Speaker 1: and the studies like this one in Rich State's poorts

513
00:28:16,000 --> 00:28:19,040
Speaker 1: states across all of our different policy heres, which if

514
00:28:19,080 --> 00:28:21,159
Speaker 1: you look at a state committee structure, let's say, in

515
00:28:21,200 --> 00:28:24,160
Speaker 1: a state senator or state house, every issue that they

516
00:28:24,240 --> 00:28:27,400
Speaker 1: deal with on the fiscal and economic side, we have

517
00:28:27,480 --> 00:28:29,880
Speaker 1: something at ALEC for them as a resource with our

518
00:28:29,920 --> 00:28:32,960
Speaker 1: task forces where they can come and bring their best

519
00:28:33,040 --> 00:28:35,040
Speaker 1: ideas and kind of share them with the rest of

520
00:28:35,080 --> 00:28:38,080
Speaker 1: America as well as then glean the best practices of

521
00:28:38,120 --> 00:28:41,000
Speaker 1: other states. And not just the best practices, but of course,

522
00:28:41,080 --> 00:28:42,960
Speaker 1: as you know, you can learn just as much about

523
00:28:43,000 --> 00:28:45,240
Speaker 1: the bad apples in the barrel and learn from the

524
00:28:45,520 --> 00:28:47,920
Speaker 1: mistakes of places like New York and New Jersey and

525
00:28:47,960 --> 00:28:51,760
Speaker 1: Connecticut and Illinois and California. So it's the sharing of ideas.

526
00:28:52,040 --> 00:28:54,800
Speaker 1: It's the free market principles, and it's the belief that

527
00:28:55,320 --> 00:28:57,760
Speaker 1: the solutions to many of our problems that we talk

528
00:28:57,800 --> 00:29:00,120
Speaker 1: about and you talk about on your show every week

529
00:29:00,320 --> 00:29:02,200
Speaker 1: are not going to come from Washington. They're going to

530
00:29:02,280 --> 00:29:04,560
Speaker 1: come from the states and the local units of government

531
00:29:04,560 --> 00:29:07,040
Speaker 1: and from the private sector. And so having the voice

532
00:29:07,080 --> 00:29:10,680
Speaker 1: of businesses. We're not afraid of talking to businesses and

533
00:29:10,720 --> 00:29:12,840
Speaker 1: talking to those in the private sector. We think that's

534
00:29:12,840 --> 00:29:15,280
Speaker 1: an important voice to have as part of the process.

535
00:29:15,520 --> 00:29:17,880
Speaker 1: But it is one of a kind organization that I

536
00:29:17,920 --> 00:29:20,959
Speaker 1: think is the future of America. It's the future of

537
00:29:20,960 --> 00:29:23,600
Speaker 1: coming up with the policy solutions that will change and

538
00:29:23,720 --> 00:29:26,600
Speaker 1: turn this country back around again. And it's just such

539
00:29:26,600 --> 00:29:28,600
Speaker 1: a pleasure to be able to have worked with you

540
00:29:28,680 --> 00:29:32,080
Speaker 1: and have you such an instrumental part and ALEC, both

541
00:29:32,120 --> 00:29:34,600
Speaker 1: yourself and of course your former staff member and now

542
00:29:34,600 --> 00:29:37,440
Speaker 1: our leader, good friend Lisa Nelson, who was our fearless

543
00:29:37,520 --> 00:29:39,800
Speaker 1: leader at ALEC, and taking so many of the things

544
00:29:39,800 --> 00:29:42,959
Speaker 1: that she learned from you and your success in Washington

545
00:29:43,200 --> 00:29:46,000
Speaker 1: and Congress as speaker, and now bringing that to ALEC

546
00:29:46,080 --> 00:29:49,800
Speaker 1: as well well. Of course, Lisa was one of the

547
00:29:49,920 --> 00:29:54,520
Speaker 1: key people and helping us write the contract with America

548
00:29:54,560 --> 00:29:57,920
Speaker 1: and then helping us win a majority back in nineteen

549
00:29:58,000 --> 00:30:00,960
Speaker 1: ninety four when she was running go Back and so

550
00:30:01,280 --> 00:30:05,160
Speaker 1: I have the greatest both affection and respect for what

551
00:30:05,320 --> 00:30:08,000
Speaker 1: Lisa brings to the job. How committed she is, that

552
00:30:08,160 --> 00:30:11,280
Speaker 1: she has put her lifetime work of trying to preserve

553
00:30:11,320 --> 00:30:14,480
Speaker 1: and expand freedom in the United States. It's always great

554
00:30:14,520 --> 00:30:16,880
Speaker 1: to work with her. As I said earlier, i've worked

555
00:30:16,920 --> 00:30:20,400
Speaker 1: with ALEC. I think my first talk was in Chattanooga

556
00:30:20,480 --> 00:30:24,360
Speaker 1: in nineteen eighty one when I was a sophomore congressman.

557
00:30:24,360 --> 00:30:28,600
Speaker 1: And I have always thought ALEC had an amazingly important

558
00:30:28,720 --> 00:30:32,640
Speaker 1: role to play nationwide. And I think that with this

559
00:30:32,720 --> 00:30:37,000
Speaker 1: particular bill on truth and taxation, that you may have

560
00:30:37,040 --> 00:30:39,960
Speaker 1: something really powerful that we like to follow up on.

561
00:30:40,400 --> 00:30:44,360
Speaker 1: I really appreciate your dedication, the fact that you've studied

562
00:30:44,400 --> 00:30:47,440
Speaker 1: this stuff so much. You're probably one of the two

563
00:30:47,520 --> 00:30:50,600
Speaker 1: or three leading experts in the entire country on the

564
00:30:50,720 --> 00:30:54,760
Speaker 1: differentiation between states that are succeeding in states that are failing.

565
00:30:54,920 --> 00:31:00,000
Speaker 1: I commend you for your continued methodical commitment to freedom,

566
00:31:00,040 --> 00:31:03,200
Speaker 1: mister speaker, and I learned from the best. Perhaps as

567
00:31:03,240 --> 00:31:06,320
Speaker 1: a very young individual in Michigan was a little too

568
00:31:06,360 --> 00:31:09,120
Speaker 1: interested in politics and policy, but I remember those go

569
00:31:09,240 --> 00:31:12,000
Speaker 1: pack training tapes and seeing all the things that you

570
00:31:12,080 --> 00:31:14,479
Speaker 1: helped develop. And so what's just a pleasure to be

571
00:31:14,520 --> 00:31:16,880
Speaker 1: with you today, and thank you for all of your partnership.

572
00:31:20,200 --> 00:31:23,360
Speaker 1: Thank you to my guests, Jonathan Williams. You can review

573
00:31:23,480 --> 00:31:28,040
Speaker 1: Alex Rich State's Poor States fourteenth edition on our show

574
00:31:28,080 --> 00:31:31,880
Speaker 1: page at newtsworld dot com. Newts World is produced by

575
00:31:31,880 --> 00:31:37,200
Speaker 1: Ginwish three sixty and iHeartMedia. Our executive producer is Debbie Myers,

576
00:31:37,600 --> 00:31:41,960
Speaker 1: our producer is Garnsey Sloan, and our researcher is Rachel Peterson.

577
00:31:42,680 --> 00:31:45,760
Speaker 1: The artwork for the show was created by Steve Penley.

578
00:31:46,440 --> 00:31:50,040
Speaker 1: Special thanks the team at Gingwich three sixty. If you've

579
00:31:50,040 --> 00:31:53,240
Speaker 1: been enjoying Newtsworld, I hope you'll go to Apple Podcast

580
00:31:53,640 --> 00:31:56,360
Speaker 1: and both rate us with five stars and give us

581
00:31:56,360 --> 00:31:59,120
Speaker 1: a review so others can learn what it's all about.

582
00:32:00,160 --> 00:32:02,440
Speaker 1: Right now, listeners of newts World can sign up for

583
00:32:02,560 --> 00:32:06,480
Speaker 1: my three free weekly columns at Gingwich three sixty dot

584
00:32:06,480 --> 00:32:11,280
Speaker 1: com slash newsletter. I'm newt Gingrich this is Newtsworld,