Policy Recommendations
- Fiscal Trim spending on housing and community development, sanitation and sewerage, and employee retirement, areas where Ohio spends more than the average state. Cut property taxes.
- Regulatory Look at Indiana as a model Great Lakes state with regard to regulatory policy, and reform Ohio’s regulatory system according to that model. For instance, consider liberalizing the workers’ compensation system and rolling back occupational licensing. Adopt a right-to-work law in line with Indiana and Michigan.
- Personal Abolish mandatory minimum sentences for nonviolent offenses, with an eye toward reducing the incarceration rate to a level more consistent with the state’s crime rate.
Analysis
Ohio used to be a thoroughly mediocre and even poor state when it comes to free-dom. But it has made progress on both fiscal policy and personal freedom over the years, moving from a low of 41st in the country in 2002 to a high of 21st two decades later. It is now 16th on fiscal policy but needs to do a lot better on regulatory policy (31st). Ohio was as bad as 46th on personal freedom in 2014 but is now 29th. It should trouble residents of the Buckeye State that their state’s policy regime is still worse than that of other Great Lakes states that have been reforming, such as Indiana, Michigan, and Wisconsin. Regulatory policy is where Ohio really falls down relative to its neighbors.
Ohio’s taxes are less than the national average overall, but it is more fiscally decentralized than the average state. Local taxes add up to about 4.4 percent of adjusted per-sonal income, whereas state taxes sit at 5.2 percent of income. The latter were in decline since a high of 6.2 percent in FY 2005 until a bump up in the past couple of years. State and local debt, government consumption, and public employment are all lower than average and in long-term decline.
On the most important regulatory pol- icy category—land-use and environmental freedom—Ohio does well, though it has slowly declined. Zoning has a light touch, but the trend is in the wrong direction, according to at least one of our sources, and renewable portfolio standards exist but are very low. Eminent domain reform could have gone further. Labor-market freedom is a problem area for Ohio. The state has a minimum wage that is getting worse, no right-to-work law, and strict workers’ compensation coverage and funding rules. Health insurance mandates are costly. Cable and telecommunications have been liberalized. The average of different measures suggests that in Ohio, the extent of occupational licensing is greater than average and has been growing. Nursing scope of practice is restrictive, but at least dental hygienists and physician assistants have been freed and the state joined the Nurse Practitioner Compact in 2021. The state has a hospital certificate-of-need law, and household moving companies are restricted. But price regulation in most markets is limited though it moved backward in 2020 when the state attorney general’s guidance interpreted Ohio’s law to ban
“unconscionable” pricing. Insurance rating was liberalized somewhat in 2015 but then restricted again somewhat in 2018. The civil liability system has bounced around over time and is now below average.
Ohio has a higher-than-average crime-adjusted incarceration rate, and it has risen over time, albeit with some slight decline lately. Meanwhile, drug and victimless crime arrest rates are lower than average, particularly for the former, and have fallen over time. A significant asset forfeiture reform was enacted in 2016; it could be improved even further, but right now Ohio is above average in this category. The state stopped suspending driver’s licenses for nondriving drug offenses in 2016, and a year earlier, it slashed prison phone call rates dramatically. A limited medical marijuana law was enacted in 2015, and the state already enjoys limited decriminalization (with legalization on the ballot in 2023). Gun rights are better than average but were mediocre until Ohio recently passed constitutional carry and strengthened the no-duty-to-retreat law. Casinos were legalized in 2012, as was sports betting in 2022. Ohio is a top educational freedom state, mostly because of a statewide voucher program, and, in 2023 expanded eligibility as well. Private schools and homeschools are sharply regulated, however. Tobacco freedom is limited, with draconian smoking bans in place for a decade. Alcohol and travel freedom are middling. But the fireworks law was liberalized recently.