The Buckeye Institute’s annual Economic Freedom of North America report conducted in partnership with Canada’s Fraser Institute found that Ohio ranks number 38 among the 50 states in economic freedom.
The report measured each state’s government spending, taxation, and labor market restrictions as indicators of economic freedom.
“The measure of a state’s economic freedom is how well it allows its citizens to reach their fullest economic potential and how well the state creates an environment where families can experience true economic prosperity,” Buckeye Institute economist Dr. Andrew Kidd explains in the report.
States that “limit economic freedom,” the report explains, are ones that “spend more taxpayer money than is needed, restrict people from pursuing their careers and dreams, discourage new business start-ups and businesses from coming to their state, and limit the ability of people to provide for their families.”
States with “greater economic freedom,” on the other hand, “provide their citizens with the opportunity for greater prosperity.”
Ohio was joined by other battleground states such as New Mexico and Minnesota in the “least free” category. States like Florida, Arizona, Colorado, and Virginia were ranked among the most economically free.
To improve its ranking, the Buckeye Institute recommends that Ohio lawmakers begin looking at the state’s pension system, implement “controlled and prudent spending,” and continue to simplify its tax code.
“For Ohioans, this report paints a concerning picture. Ohio moved up several spots a year ago, driven by Gov. John Kasich’s tax reform efforts. Yet, this year, Ohio has stayed in roughly the same position, taking up membership with the bottom third of economically free states,” Kidd said in a press release.
Compared to neighboring states, Ohio ranked below Indiana, Pennsylvania, and Michigan, but above Kentucky and West Virginia. Overall, Ohio has consistently lagged behind the national average for economic freedom from 1981-2016—the most recent year data is available.
“Ohio continues to lag behind many of its neighbors and, compared to last year’s rankings, is flat lining when it comes to overall economic freedom,” Kidd suggested. “When looking at Ohio’s rankings in specific categories, it is easy to understand why so many Ohioans struggle to achieve any form of economic prosperity.”
Of particular concern to Kidd and his colleagues is Ohio’s ranking in the category of insurance and retirement payments as a percentage of personal income, where the state came in dead last.
Battleground State News previously reported on the nation’s pension crisis, which national lawmakers have so far failed to address. The Joint Select Committee on Solvency of Multi-Employer Pension Plans, co-chaired by Sen. Orrin Hatch (R-UT) and Sen. Sherrod Brown (D-OH), said in a recent statement that it “would not be possible to finalize a bipartisan agreement” before its self-imposed deadline.
But Kidd ended on a positive note, saying that “what this report shows us is Ohio can increase the economic freedom offered to it citizens.”
– – –
Anthony Gockowski is managing editor of Battleground State News and The Minnesota Sun. Follow Anthony on Twitter. Email tips to [email protected].
