If you’ve ever been in a road race, you probably know this feeling:
There you are, jogging along. You look down at your watch and confirm that you’re keeping a good pace, maybe even a personal best.
Then – seemingly out of nowhere – another racer just blows right past you and builds an ever-widening lead.
It doesn’t mean you weren’t actually doing well. But it does mean you won’t win the race.
So it goes with economic competitiveness. For years, Georgia has steadily improved in many ways. But other states are improving even faster.
That’s the upshot of the 2025 edition of “Rich States, Poor States.” This annual publication measuring states’ economic outlook and performance came out on Tax Day – and it shows Georgia losing ground in the uber-competitive race among states.
We ranked 13th in the latest report’s rankings for economic outlook, which takes account of a state’s public policies.
That’s down two spots from 2024. In economic performance, we came in ninth for the second straight year.
Now, it might seem churlish to complain too much when our economy ranks so highly. But you have to understand that there’s a top group separating itself from the rest of the country – and that’s the group to which we ought to compare ourselves.
“The top 15 is incredibly competitive with lots of movement,” Jonathan Williams, who serves as president and chief economist of the American Legislative Exchange Council, told me.
Williams co-authored the report along with renowned economists Arthur Laffer and Stephen Moore. So his comment bears further exploration.
First, there is a clear top 15 in economic outlook. For three straight years, that group has included (in order of their 2025 ranking) Utah, Tennessee, Indiana, North Carolina, North Dakota, Arizona, Idaho, South Dakota, Texas, Arkansas, Oklahoma, Wyoming, Georgia, Nevada and Florida. Twelve of the 15 have been that group for at least a decade, but Georgia only since 2021.
There seems to be a correlation between good policy and good performance. Only two of the top 15 states for policy, North Dakota and Wyoming, finished in the bottom 15 for economic performance. Among the bottom 15, which is almost as static as the top group, only Oregon finished in the top 15 for economic performance.
While it’s good to be in the top group, Georgia is drifting toward the bottom of it. That’s better than being at the top of the bottom group, but it’s not where we ought to aspire to be.
Second, comparisons to other states are instructive. One state that leapfrogged Georgia this year was Arkansas, which rose to 10th from 15th. In many ways, that was a long time coming: Since 2015, Arkansas has cut its individual income tax rate almost in half (from 6.9% to 3.9%) and its corporate income tax rate by about a third (from 6.5% to 4.3%).
Just as important, Arkansas has avoided jacking up other taxes. Arkansans pay only slightly more in property tax, sales tax and other taxes than they did in 2015. The state has also reduced its reliance on borrowing, measured as debt service as a share of tax revenue.
Georgia, meanwhile, cut its individual income tax rate for the first time in 2018. That rate has fallen from 6% to 5.39%, a decline of only about one-tenth. (The rate will fall to 5.19% thanks to a bill Gov. Brian Kemp signed the same day the report was published.)
Again, it’s not as if Georgia has been standing pat. Our state reaps the rewards of steady and sound economic policy:
Our economic growth has been strong, our employers continue to create lots of jobs, and Americans are still drawn here from other states in large numbers.
But the race isn’t over. In fact, the sobering thing about this race is that it never ends.
As other states try to surpass us, we must work to improve ourselves even faster.
