INDIANA, (WOWO): A new report released Wednesday gives Indiana top grades for economic health.

The American Legislative Exchange Council's “Rich States, Poor States” report ranks Indiana number three in the nation in terms of economic performance and outlook. That's up from number 24 two years ago.

The report cites economic competitiveness that allows Hoosier businesses and people to grow. Indiana comes in behind Utah at number one and North Dakota at number two. North Carolina and Arizona follow Indiana.

ALEC Vice President Jonathan Williams says recent income tax cuts and Indiana's status as a Right to Work state put Indiana in good standing. Williams says the report is an opportunity to give lawmakers and citizens across the nation better insight into what creates economic wealth for states. He adds that states that don't tax income heavily are ones that tend to perform better.