#9 Iowa

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

From 2012

State Facts

Net Migration Rate (?) -1.8 % 
Personal Income Growth (?) 2.68 %
How does the freedom ranking relate to these?


Iowa has long stood out above other center-left states on economic freedom. The state benefited from this policy regime, federal farm subsidies, and the 2002–8 global commodity boom to post impressive growth in the past decade and a half. However, there is some indication that its competitive policy advantages are starting to fade.

State and local taxes are pretty close to average in Iowa, with the latter being slightly above. Iowans also have some degree of choice in local government, with about one different government per 100 square miles. Subsidies and debt are quite low. Government employment is about average: 13.6 percent of private employment in 2014.

Iowa stands out more on regulatory policy. Land-use freedom is ample, though the state hasn’t done as much as some others about eminent domain for private gain. It is a right-to-work state without a minimum wage, and workers’ compensation mandated coverages were liberalized slightly in 2007–8. Telecommunications and cable have long been partially deregulated. Occupational freedom is about average and has fallen over time because of the licensing of new occupations. Insurance freedom fell with a switch to “file and use” in 2007–8. The civil liability system is rated well above average and has generally improved.

Iowa has had same-sex marriage since 2009, due to a court decision. Incarceration and victimless crime arrest rates are a little lower than average. Educational freedom is high, because the state has a long-standing tax credit scholarship program as well as interdistrict public school choice. Homeschooling was significantly liberalized in 2013–14. However, private schools are tightly regulated, with mandatory teacher licensure and detailed curriculum control. Gambling freedom is high, and the industry has generally grown over time. Cannabis freedom is sharply limited; a single marijuana offense not involving minors can carry up to 50 years of prison time. For a rural state, Iowa does not do very well on gun freedoms, though it improved in 2009–10. Class III weapons are banned, even though their ownership is tightly regulated federally. Purchasing handguns requires a permit and waiting period, and open carry requires a license. Alcohol freedom is mediocre because of state involvement in wholesaling and high distilled spirits taxes.

Policy Recommendations

  • Fiscal: Trim spending on areas where the state spends more than the national average – education, hospitals, highways, and public welfare – and use the savings to trim property, sales, income, and motor vehicle license taxes.
  • Regulatory: Repeal CON requirement for new hospital construction. In 2014 this action would have raised Iowa from fifth to third on regulatory policy.
  • Personal: End teacher licensing for private schools and make curriculum requirements general rather than detailed.
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