April 17, 2013

How Free Is New England?

William Ruger

Assistant Professor of Political Science, Texas State University - San Marcos

Jason Sorens

Senior Affiliated Scholar
Summary

Ever since immigrants seeking liberty began arriving on its shores centuries ago, New England has been a symbol of freedom for the rest of the world. It has hosted the Pilgrims, birthed the American Revolution and sparked the Abolitionist Movement. But today many Americans see it as a place where government has grown too large and intrusive.

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Ever since immigrants seeking liberty began arriving on its shores centuries ago, New England has been a symbol of freedom for the rest of the world. It has hosted the Pilgrims, birthed the American Revolution and sparked the Abolitionist Movement. But today many Americans see it as a place where government has grown too large and intrusive.

In our new book, "Freedom in the 50 States," we look at a wide variety of current policies across the U.S. to determine the impact that government is having on people's lives. By analyzing economic and personal freedoms cherished by both the left and the right, and weighing each based on how citizens value it, we ranked each state's overall respect for individual liberty.

Our findings support the view that New England is less free than other parts of the country. Rhode Island finished near the bottom of our index, in 46th place. Massachusetts and Connecticut ranked 30th and 40th, respectively. The real outlier is New Hampshire, the region's freest state, No. 4 in the U.S.

These rankings, however, are far from the whole story. The numbers mask some important and interesting policy differences among the New England states.

Take taxes. In spite of the unfortunate nickname "Taxachusetts," Massachusetts's state and local tax burden is right at the national average: 9.6 percent of income. That's actually the second-lowest figure in New England. (New Hampshire, unsurprisingly, has the lowest, at just 8 percent of income.)

Moreover, spending on state and local government operations as a percentage of the economy is actually lower in every one of the New England states than the national average. Some do have high taxes, but that is mainly because they spend more on such transfer programs as Medicaid and receive less money in federal grants than most other states.

New Englanders tend to have greater personal freedom than other Americans. Maine comes in 3rd on personal freedom, New Hampshire 5th, Massachusetts 10th, and Vermont 11th. Connecticut and Rhode Island are more paternalistic, at 32nd and 33rd. New England states generally have low incarceration rates and deprioritize arrests for victimless crimes relative to violent and property crimes. All of them - other than New Hampshire - have legalized medical marijuana, and New Hampshire seems likely to do so this year. They have all legalized same-sex marriage or civil unions.

The real problem in New England is burdensome business regulation. Only New Hampshire has resisted hobbling the individual and small-group health insurance markets with mandates and price controls. Every New England state scores below average on labor laws. Only Maine lets an independent professional start a small business without facing excessive red tape.

High cost of living may be the single most important economic problem facing New England, and zoning laws are responsible for much of the problem. All six states make residential development difficult with exclusionary zoning policies. Economists have found that these restrictions significantly drive up the cost of housing. New England states price poor and working-class families out of high-performing public school districts.

We have found that excessive regulation is strongly associated with weaker economic growth at the state level. So Rhode Island, Massachusetts and Connecticut, which all do especially poorly on this measure, have good reason to implement reforms in order to attract business.

We also find that freer states attract residents from less-free states, controlling for climate, cost of living, amenities and crime. Four of the six New England states lost people, on net, to the rest of the country from 2000-2012, with Maine and New Hampshire being the exceptions. Massachusetts and Rhode Island both lost over 4 percent of their 2000 population, an astonishing figure.

New England earned its reputation as a haven for liberty from its defense of religious freedom, defiance of taxation without representation, and support for civil rights. The heavy-handed policies we address here are minor in comparison, but nonetheless hurts the lives of ordinary people.

Even politicians skeptical of our take on freedom are now recognizing that they need to try more free-market policies, or else they'll continue to see their residents - young and old - take their families and their tax dollars out of the area.