Relative to other states, Ohio has improved just slightly on economic freedom since 2008, but its policy regime is worse than other Great Lakes states that have been reforming, such as Indiana, Michigan, and Wisconsin.
Ohio is a little more fiscally decentralized than the average state. Local taxes add up to about 4.6 percent of personal income, while state taxes sit at a projected 5.0 percent of income in FY 2015. The discovery of shale gas has allowed Ohio to raise severance taxes and essentially shift some of its tax burden to consumers of natural gas throughout North America. Government subsidies are a bit higher than average in Ohio, while state and local debt and employment are lower than average.
On the most important regulatory policy category, land-use and environmental freedom, Ohio does well. Zoning has a light touch, and renewable portfolio standards exist but are very low. Labor-market freedom is a problem area for Ohio. The state has a minimum wage, no right-to-work law, and strict workers’ compensation coverage and funding rules. Cable and telecommunications have been liberalized. The average of different measures suggests that in Ohio, the extent of occupational licensing is greater than average. Nursing scope of practice is the most restricted in the country. The state has a hospital CON law, but price regulation in most markets is limited. The civil liability system is worse than average, but a punitive damages cap enacted in 2005 has changed perceptions somewhat.
Ohio has a higher-than-average, crime-adjusted incarceration rate, and it has risen over time. Meanwhile, victimless crime arrest rates are lower than average and have fallen over time. The state’s asset forfeiture law and practice are both subpar. Apart from decriminalization of small-scale possession, cannabis remains highly restricted. Gun rights are a bit better than average. The state is about average on gambling. Educational freedom is above average, due mostly to a statewide voucher program, but private schools and homeschools are sharply regulated. Draconian smoking bans have been in place for a decade. The state had a super-DOMA banning contracted gay relationships at the end of 2014, and so the Supreme Court’s Obergefell decision should result in an increase in the state’s personal freedom (see Appendix Table B17).