#1 North Dakota

 
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North Dakota State Overview

State Facts


Net Migration Rate (?) 3 % 
Personal Income Growth (?) 2.55 %
How does the freedom ranking relate to these?

Analysis

North Dakota, according to the freedom index, is the freest state in the United States. It scores exceptionally well on regulatory and fiscal policy. Moreover, North Dakota scores slightly above average on personal freedom. It is also the state that improved the most over the last decade.

Like its neighbor to the south, North Dakota’s score is exceptional on fiscal policy. It has very low taxes and government debt. However, its spending is uncharacteristically high. Like Oklahoma, the government has a bloated payroll that represents 15 percent of the private workforce.

A big part of North Dakota’s high ranking on regulatory policy is due to the state’s excellent liability system. North Dakota also scores well on land-use freedoms, with better-than-average residential land-use regulations and significant eminent domain reform. North Dakota possesses a strange workers’ compensation funding policy: all private and self-insurance is banned, and employers are required to contribute to a state fund. However, it is a right-to-work state. Occupational licensing is excessive but the fees and education/experience requirements are relatively low. Nurse practitioners and physician assistants have greater scope of practice than they do in many other states. Health insurance coverage mandates are a bit worse than average, but the state only has rate bands. Cable regulation has not been reformed.

North Dakota scores well in a few personal freedom areas but has much room for improvement. Gun control laws are fairly relaxed. Alcohol regulations are light, while tax rates on beer and wine are average and spirits taxes are fairly low. Cigarette taxes are low but smoking bans exist, with exemptions for bars and restaurants. Motorists also operate with relative freedom, except for sobriety checkpoints and (most notably) the personal injury coverage mandate. On the downside, marijuana laws are poor. The state’s asset forfeiture rules score a standard deviation worse than the mean. In particular, the state should change who has the burden of proof and what is the standard of proof required for forfeiture. Unfortunately, North Dakota has a very high level of non-drug victimless crimes arrests. However, its drug enforcement rate is actually ranked below average and its overall incarceration rate approaches a standard deviation better than the mean. North Dakota has some of the worst school regulations in the country. Private schools are heavily regulated, with state approval, teacher licensing, and detailed curriculum oversight required. Homeschoolers are similarly tightly regulated.

Policy Recommendations

  • Reduce the size of the government sector to make it consistent with national norms. Spending cuts would be especially warranted in the areas of miscellaneous commercial activities and parks and recreation.
  • Eliminate occupational licensing requirements for massage therapists, makeup artists, bill and account collectors, occupational therapist assistants, and athletic trainers.
  • Prioritize crimes against persons and property so as to lower the non-drug victimless crimes arrest rate and focus law enforcement resources on preventing and punishing more serious crimes.
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