State Facts
Analysis
Alaska is an unusual state, with ample protection for personal freedoms, conservative ideology, powerful labor unions, and the biggest state government in the country, funded by taxes on energy companies. The methodological changes in this edition of Freedom in the 50 States have upgraded the state, which was formerly downgraded sharply for its fiscal regime.
Alaska suffers significantly from not having to make hard fiscal choices. It has characteristics of a rentier state. For instance, over a quarter of the state’s workforce is employed by state or local government, and that figure does not include federal employees. Alaska has the second highest debt and government consumption to personal income ratios in the country. Taxes on residents are low, however, because mineral severance taxes make up such a significant share of the state budget.
In the regulatory policy dimension, Alaska scores poorly on eminent domain reform, as well as on labor law because of its minimum wage, lack of a right-to-work law, and strict workers’ compensation rules. But it scores relatively well on health insurance due to few price controls, especially in the nongroup market, and on local zoning regulation. Alaska ranks in the middle on occupational freedom, scoring far worse than average on the extent of occupational licensing but far better than average on health professionals’ scope of practice. The state’s court system is a bit worse than average. It also has a certificate-of-need (CON) law for new hospital construction.
Alaska does extremely well on personal freedom, however, scoring first on the freedom index’s ranking. Reasons for this score include the fully legalized possession of small amounts of marijuana (accomplished through a court ruling); among the least restrictive gun control laws in the country, including the right to carry concealed weapons without a permit; low incarceration and drug arrest rates; and possibly the least restrictive homeschooling laws in the country. (Private schools are also not heavily regulated, with the exception of a partial teacher licensing law.) Nevertheless, Alaska could improve on alcohol laws (taxes are high), gaming freedom, privacy (police may take DNA from all felony arrestees), asset forfeiture, marriage freedom (no same-sex partnerships are recognized, and there is a waiting period), and campaign finance freedom (contribution limits are quite low).
Policy Recommendations
- Cut spending on the areas of grossest overspending relative to national averages: public schools (for which Alaska has the highest spending-to-income ratio in the nation), police and fire protection, corrections, administration (especially financial administration and public buildings), and “miscellaneous commercial activities.”
- Repeal CON requirements for hospital construction. Among politically feasible regulatory policy reforms, this one is likely to make the most difference.
- Allow same-sex civil unions, which are not prohibited by the same-sex marriage ban in the constitution, and repeal waiting periods on marriages. This change would raise Alaska two places in the overall freedom index.
