Arkansans are getting ready to celebrate their freedoms over the holiday weekend, so it’s a fine time to take a look at a recent study by the Mercatus Center at George Mason University that ranked all 50 states by the freedoms their citizens enjoy.
Bad news for Arkansas: when it comes to freedom, we’re below average. The rankings Mercatus gave Arkansas on fiscal policy, regulatory policy, economic freedom and personal freedom combined to push the state just below “mediocre.”
The history of Arkansas’s recent economic development efforts is that we all too often lose jobs to our competing neighbor states. Perhaps part of the answer lies in these rankings.
Fiscal policy is rated based on government spending, debt and taxes as a percentage of income. Also important is how decentralized the fiscal policy is. For example, are county and school board policies set by the state?
Arkansas ranks 20th for fiscal policy, which is above average nationally. However, in our region, our neighbors to the west in Oklahoma and the east in Tennessee are ranked 3rd and 4th respectively, while Missouri is 8th and Texas is ranked 12th. With Mississippi ranked 23rd, close behind Arkansas, only Louisiana is ranked significantly below us.
Regulatory policy is rated based on labor regulations, such as minimum wage, workers compensation burdens, and union laws. Equally weighted in the study is each state’s health-insurance coverage mandates. Also included, to a lesser extent, is occupational licensing and the tort structure. Eminent domain policies are also included in this category.
In regulatory policy, Arkansas is at 34th, just ahead of Louisiana’s 37th, making Arkansas a contender for our region’s bottom. Tennessee leads the pack at 14th, followed by Oklahoma at 22nd, Missouri at 24th, Texas at 26th, and Mississippi at 30th.
Economic freedom is a combination of the above two indices, placing all the variables into one ranking. This provides a clearer reference point and makes it much easier to compare states across the nation.
Tennessee leads the region again in economic freedom at 6th place, just ahead of Oklahoma at 7th. Missouri ranks well at 11th, and Texas at 15th. Mississippi takes the next spot in the region at 30th while Arkansas is right behind at 32nd. Louisiana isn’t far behind at 35th.
In personal freedom rankings, Missouri takes the top spot in the region and is 6th across the nation. Mississippi comes in at 12th and Texas is 13th nationally. Arkansas is 21st, followed by Oklahoma at 29th, Louisiana at 32nd, and Tennessee at a paltry 39th. We enjoy a fairly high degree of personal freedom in Arkansas, according to the study, in part because of no adult helmet laws and limited oversight of private and home schools.
The secondary enforcement of seatbelt laws also contributed to this higher ranking, but this criteria is out of date. Seatbelt enforcement in Arkansas is now primary, meaning the police can pull you over just because you care not wearing your seatbelt. This suggests that Arkansas has likely slipped in the rankings slightly.
Of the three rankings that most affect jobs, Arkansas ranks 6th or 7th in our eight-state region. Arkansas owes a lot to the Revenue Stabilization Act that requires discipline in fiscal policy. But our highly centralized state control and funding lead to excess regulation. Eminent domain protections are particularly weak and pose possible problems. In short, we need to do much better if we want to compete for businesses and jobs.
At least in our personal lives, Arkansans are relatively free. Unless you happen to be a smoker.
Christian Olson is an adjunct analyst at the Advance Arkansas Institute.