‘FREEDOM in the 50 States” is the most comprehensive ef fort to date to rank states by how their public policies influence “individual freedom in the economic, social and personal spheres.”
New York state is dead last in the freedom index “by a wide margin,” the new study by George Mason University’s Mercatus Center reports.
The study includes dozens of variables, from social and personal freedoms (such as parents’ rights to educate their children) to regulatory freedom (such as the degree of occupational- licensing requirements) to fiscal liberty (as measured, for instance, by states’ debt burdens, which represent a constraint on future generations).
That New York’s economic freedom is poor won’t astonish businesses operating here, which must deal with an octopus-like regulatory regime, a civil-justice system that favors plaintiffs over defendants, high taxes and crushing per-capita government debt. But New Yorkers, who like to consider themselves enlightened and socially permissive, might be surprised at where their state ranks on the study’s personal-freedom index — third from the bottom.
Why? Because in New York, personal freedoms are often narrowly defined as liberties that Albany politicians deem suitable. Otherwise, state policy is extremely restrictive. While New York has liberal gambling laws, it regulates home schooling extensively, seizes property often through eminent-domain laws and imposes health-insurance mandates that limit choices.
What are the consequences of this lack of freedom? The best way to judge is to look at the collective condition of the states with the worst rankings. (New Jersey is in 49th place, following California and Rhode Island.)
Together, New York, New Jersey and California face some $65 billion in budget deficits in 2009, amounting to more than two-thirds of the budget gaps faced by all 50 states. These states’ stratospheric spending and taxes have stifled economic growth and left them scarily unprepared for the economic downturn.
Job growth has lagged, too. New Jersey in the last decade saw virtually no private-sector job gains, even counting the boom years before this steep recession. California’s unemployment rate is the country’s fourth highest, and Rhode Island’s is sixth. The bottom-rankers also have reputations as the places that citizens most want to flee for other states.
What a contrast with the study’s freest states: New Hampshire, Colorado, South Dakota, Idaho and Texas. They all have unemployment rates at or below the national average. (New Hampshire’s is 6.2 percent, or two full points below the nation’s, according to recent Labor Department statistics.) Every one is also a net winner in terms of domestic migration, with far more citizens entering than leaving.
The Mercatus study makes clear that what ails New York can’t be boiled down to any one of its curbs on freedom — whether it’s a high in- come-tax rate, restrictions on development or a bureaucratic licensing regime. It suffers from the vise grip such Albany politicians as Assembly Speaker Sheldon Silver have put on life in general. Reform won’t be as simple as cutting a tax or eliminating a regulation. New York needs fundamental change to make the state democratic again, and it needs reform candidates willing to push for that change.
Such candidates would fight to take away legislative redistricting power from state lawmakers — who protect themselves when they draw voting districts to the point that 98 percent get re-elected — and give it to a nonpartisan commission charged with redrawing districts to make them competitive again, as states like Iowa and Arizona have done.
A reform agenda might also include instituting term limits to eliminate Albany’s lifetime sinecures, and adding greater transparency to state and local government operations by putting online more details about expenditures and contracts, so citizens can see firsthand how their tax dollars are spent.
Undemocratic and unfree countries often restrict the flow of their businesses to other, more appealing, places. Because New York state doesn’t have that option, its long decline will continue — unless it has a new birth of freedom.
Steven Malanga is sen ior editor of City Journal and a Manhattan Institute senior fellow. Adapted from City Journal.