#50 New York

 
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The overall freedom ranking is a combination of personal and economic freedoms.

 
#50
 
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New York State Overview

State Facts


Net Migration Rate (?) -9 % 
Personal Income Growth (?) 0.98 %
How does the freedom ranking relate to these?

Analysis

New York is by far the least free state in the Union. It is therefore no surprise that New York residents have been heading for the exits: 9.0 percent of the state’s 2000 population, on net, left the state for another state between 2000 and 2011, the highest such figure in the nation.1

New York has, by a wide margin, the highest taxes in the country: 14.0 percent of income, three and a half standard deviations above the national mean. New York is also the most indebted state, setting its own record high in FY 2010 at 33.2 percent of income. By comparison, government consumption plus subsidies and employment are only ranked slightly higher than average, implying that the state could benefit by shifting revenue sources from taxation and license fees to user fees.

New York fares poorly on economic regulation. New York City has rent control, which is estimated to cost residents about $300 million in deadweight loss alone.2 Eminent domain abuse is rampant. Labor law is poor, with no right-to-work law, restrictions on workers’ compensation funding options, and a required short-term disability program. New York has the strictest health insurance community rating regulations in the United States, which have wiped out the nongroup market. There has also been a dramatic increase in mandated coverages in 2009—10, rising to 54.9 percent of the cost of a no-mandated-benefit policy. On the positive side, the court system is slightly better than average. While insurance regulation remains strict, there has been a slight liberalization of personal auto insurance in 2009—10.

On personal freedoms, gun control laws are extremely restrictive, but marijuana laws are ranked better than average. Tobacco laws are extremely strict, and cigarette taxes are the highest in the country, encouraging the growth of a dangerous black market.3 Motorists are highly regulated, and home school regulations are excessive, but alcohol taxes are low, and so are non-drug victimless crimes arrests and the crime-adjusted incarceration rate. Same-sex marriage was legalized in 2011, which should raise the state about three places on personal freedom.

Policy Recommendations

  • Cut spending on police and fire protection, hospitals, housing and community development, libraries, public welfare, sanitation and sewerage, miscellaneous commercial activities, public transit, and employee retirement. Reduce all taxes, and pay down debt.
  • Abolish rent control. This one move would have raised New York eight places on regulatory freedom.
  • Slash tobacco taxes. Even adopting Pennsylvania’s still-restrictive tobacco regime would boost New York three places on personal freedom.
1. New York’s slight population increase over this period came solely from foreign immigration and natural increase. 2. The figure, which is converted into 2010 dollars, is derived from Edward L. Glaeser and Erzo F. P. Luttmer, “The Misallocation of Housing under Rent Control” (National Bureau of Economic Research Working Paper No. 6220, 1997), http://www.nber.org/papers/w6220. 3. Carrie Johnson, “Trade in Black-Market Cigarettes: Hot, Dangerous,” National Public Radio, September 19, 2010, http://www.npr.org/templates/story/story.php?story Id=129934561.
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