#31 Pennsylvania

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

 
#31
 
Overall
Change
+2
From 2009

Pennsylvania State Overview

State Facts


Net Migration Rate (?) -0.3 % 
Personal Income Growth (?) 0.64 %
How does the freedom ranking relate to these?

Analysis

Pennsylvania is freer than all its neighboring states except for Delaware. However, that is not saying much given that the state borders some of the country’s worst performers, such as New York, New Jersey, and Maryland.

The state’s ranking remains mediocre on fiscal policy. It has higher-than-average taxes but performs much better than most states on government spending and employment. However, it has high government debt and is not as fiscally decentralized as most states.

Pennsylvania scores below average in the regulatory realm. It does not do well on tort abuse and performs even worse on residential land-use regulations. The state even mandates free speech on some private property! It has, however, partially reformed its eminent domain laws. Pennsylvania also fares relatively poorly on labor market freedom. It is not a right-to-work state and has below-average workers’ compensation regulations. Pennsylvania does do well on health insurance freedom and occupational freedom, where it ranks fifth. It is one of only three states to have no form of community rating in small group and individual health insurance (Hawaii and Virginia are the other two). However, mandates are rather high and have been rising in recent years. Occupational licensing scores quite low, nearly two standard deviations better than average. Licensing fees and educational requirements are also low. The state still needs to deregulate cable.

Pennsylvania’s gun control laws are roughly average for the entire country. The state does badly on alcohol policy, ranking 47th. Distribution is highly controlled and implicit taxes on wine, in particular, are excessive (over three standard deviations higher than the mean). Its ranks are mediocre on tobacco freedom and marijuana freedom. Smoking bans have recently been put into place, but there is a “ventilated area” exception for restaurants, and bars are simply required to have nonsmoking sections. Cigarette taxes are a bit above average. The state’s low ranking in personal freedom is heavily affected by its poor performance on victimless crimes enforcement (though it is roughly average in terms of drug arrests). An average level in this area alone would have raised it three places on personal freedom. The state has dramatically liberalized gambling, adding quite a bit to its treasury and placing Pennsylvania among the best states for gaming freedom in the country. Pennsylvania’s home school laws are perhaps the worst in the country, and its private school regulations are not much better.

Policy Recommendations

  • Reduce spending (especially on public welfare and state retirement benefits) and numerous minor taxes that are relatively high by national standards.
  • Protect property rights better by loosening land-use restrictions and eliminating mandated free speech at private shopping malls.
  • End the state liquor monopoly and reduce the effective tax rate on wine.
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