#29 Arkansas

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

 
#29
 
Overall
Change
-1
From 2012

State Facts


Net Migration Rate (?) 2.8 % 
Personal Income Growth (?) 2.32 %
How does the freedom ranking relate to these?

Analysis

Throughout our period, Arkansas has been mediocre on economic freedom. Its personal freedom has declined relative to other states in recent years, although this observation does not include same-sex marriage legalization, which occurred because of the Supreme Court decision in 2015 and should raise the state’s rank substantially.

Arkansas is highly fiscally centralized. State taxes are way above the national average, and local taxes are way below. Overall, it ends up being about average in tax burden. Debt and subsidies are low, but government employment is high.

Like many other southern states, Arkansas does well on land-use and labor policies and somewhat poorly on cronyist entry and price controls. However, it does better than most other southern states, and indeed the national average, on its civil liability regime. It has also started to deregulate telecommunications and in 2013 enacted statewide video franchising. The extent of occupational licensing, according to two different measures, is more than a standard deviation worse than the national average. Hospital construction requires a certificate of need, and there is an anti-price-gouging law and also a general law against “unfair pricing” or sales below cost.

Arkansas does better than most of its neighbors on criminal justice policies. Victimless crime arrests are below average, and the crime-adjusted incarceration rate is not much above average. On the other hand, the state does a bit worse than one might expect on gun rights, with heavy training requirements and significant limitations on the right to carry concealed. Marijuana laws are unreformed. In personal freedom categories other than these and the aforementioned marriage laws, Arkansas deviates little from the average. School choice particularly looks like an opportunity for improvement, given the state’s fiscal centralization (so there’s not much choice among public schools), its generally conservative ideological orientation, and its minority student populations.

Policy Recommendations

  • Fiscal: Cut the state sales and use tax, which is high. Let local governments vary property taxes to meet local needs and desires, reducing state aid for education and other purposes.
  • Regulatory:Roll back occupational licensing. Some occupations that could be deregulated include sanitarians, title abstractors, interpreters, dietitians and nutritionists, pharmacy technicians, veterinary technologists, opticians, athletic trainers, occupational therapist assistants, massage therapists, private detectives, security guards, landscaping contractors, tree trimmers (locally), funeral apprentices, collection agents, 911 dispatchers, tree injectors, construction contractors, security alarm installers, well drillers, mobile home installers, and boiler operators.
  • Personal: Enact a generous tax credit for contributions to private scholarships for K–12 education.
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