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Richard Rider

Californians live in the least free state in the nation — except for NY

I write about and compare California with other states.  While I cover many aspects, most have to do with monetary issues — taxes, regulation, litigation, utility costs, education funding, etc.

But we should also look at a broader index that includes not only the issues I highlight, but also compares the personal freedom factors among states.  For years the Mercatus Center has done exactly that — comparing states on a more fundamental “freedom” level.  They incorporate most of my concerns, while factoring in personal freedoms.

The new rankings are now out.  Not good for the Golden State.  Indeed, as Professor Mark Perry notes below, the results are not good for people living in Democrat states — period!

California continues its dismal freedom ranking of the last decade — second worst only because of totalitarian NY state.  NJ is nipping at our heels in the 48th spot.

The three MOST free states?  North Dakota (up from fifth best last year), South Dakota and (perhaps surprisingly) Tennessee in third place.

The Mercatus website has more detail on each state, and the factors considered.  It’s worth a visit.

Here’s the study’s summation of California — and their recommendations:

California not only taxes and regulates its economy more than most other states, but also aggressively interferes in the personal lives of its citizens.

Government consumption (at 11.0 percent of personal income) and employment (at 12.8 percent of private-sector employment) are about average, but debt is high (at 25.8 percent of income). The budgetary categories on which California spends significantly more than the rest of the country include general administration, housing and community development, utilities, and employee retirement. Individual and business income taxes are well above average. The total tax burden comes to 10.8 percent of income, a standard deviation above the national average.
Government interference in the land market is rife, as California’s zoning laws are among the toughest in the country, and the state is one of just four to authorize rent control, while eminent domain abuse has seen only token reform. Labor laws impose many costs on employers, from the minimum wage and a universal workers’ compensation mandate to short-term disability insurance and paid family leave. Health insurance mandates add about 49.5 percent to the cost of a premium of a policy without any of the mandated benefits. However, there is no community rating, guaranteed issue, or prior approval of rates in the nongroup health insurance market. Occupational licensing is rampant, and the nursing professions are tightly regulated. The state’s liability system is one of the poorest in the nation and has gradually worsened over time. The life and property/casualty insurance markets are among the most regulated in the nation. On the plus side, there is no certificate-of-need (CON) law for hospital construction.
Despite a reputation for social liberalism, California scores badly on personal freedoms. It has the strictest gun control laws in the country, prohibiting open carry and making concealed carry almost impossible, banning several types of weapons, imposing waiting periods on all firearms purchases, and onerously regulating dealers and ammunition. After Alaska, it has the most relaxed marijuana laws, but it nevertheless has a high incarceration rate, and its drug enforcement rate is only average. It shares the maximum possible score on marriage freedom with several other states, because it allows civil unions equivalent to marriage. California was the first state to enact a smoking ban in restaurants and bars, but the ban is slightly less strict than those since adopted in other states. Travel freedom is low due to a primary seat belt law, motorcycle and bicycle helmet laws, a statewide primary-enforcement cell phone driving ban, an open-container law, and sobriety checkpoints. Little gambling is allowed.

Policy Recommendations

  • Cut state spending in the categories called out above and enact tight ex post balanced-budget requirements to reduce future debt levels.
  • Enact tort reforms to make the state more attractive for business investment. Current property regulations, occupational licensing, and labor laws also deter economic activity investment.
  • Expand legal gambling. California’s political culture is unlikely to have many qualms about gaming, but legalizing non-tribal casinos would require a constitutional amendment.
Some might be interested in how CA (and other states) rank JUST on the category of personal freedoms.  To see the answer, go to page 75 of the full study for the table ranking on this criteria:
By this criteria, the three most free states (in order) are Alaska (by far), Nevada and Maine.  Sadly, California is still near the bottom, ranked 47th.
On his excellent Carpe Diem blog (subscribe for free daily email at, Professor Mark Perry did an interesting,quick analysis of this just-released Mercatus study that ranked the states by the degree of freedom found.  Here’s his summary.
Freedom in the 50 states, but mostly in the red states?
There is a HIGH correlation between GOP-controlled states and (relative) freedom — and
Dem states and the LACK of such freedom.

SUMMARY: A quick preliminary study reveals an interesting pattern: Eight of the top 10 most economically free states (North Dakota, South Dakota, Tennessee, Oklahoma, Idaho, Virginia, Georgia and Utah) are solid red states with a Republican governor and Republican-controlled state legislatures. No. 4 ranked New Hampshire is a mixed state with a Democratic governor and Democratic-controlled state House but a Republican-controlled state Senate; and No. 7 Missouri is also mixed with a Democratic governor and a Republican-controlled state House and Senate.
Of the ten least economically-free states, eight (New York, California, Hawaii, Rhode Island, Illinois, Maryland, Vermont, and West Virginia) are solid blue states with a Democratic governor and Democratic-controlled state legislatures. No. 48, New Jersey, is a mixed state with Republican Governor Chris Christie but Democratic majorities in both the state House and Senate; and No. 41 Mississippi is a solid red/Republican state.