#3 Indiana

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

From 2012

Top 5 States

State Facts

Net Migration Rate (?) -0.9 % 
Personal Income Growth (?) 1.51 %
How does the freedom ranking relate to these?


Indiana has quietly built a record as one of America’s freest states and the freest state in the Great Lakes region. Although it has still experienced small net outmigration to the rest of the country over the past 15 years, its record in that department has been better than that of any other of the eight Great Lakes states, and its economic growth has been better than the national average since 2006.

Although Indiana’s fiscal policy deteriorated quite a bit between FY 2000 and FY 2009, it has made a good recovery since then. Local taxes fell from 4.1 percent of income in FY 2009 to 3.4 percent in FY 2012, even as state taxes have remained essentially steady. Government debt also fell over that period. Government subsidies and employment remain a little smaller than the national average.

Although the PPACA disproportionately harmed the state because of its previously fairly free-market health insurance policies, Indiana has continued to improve those elements of regulatory policy that it can. Land-use freedom is high by any measure. The state passed right-to-work legislation in 2011–12, and it is a model state for telecom deregulation. Occupational freedom is extensive, though not for second-line health care professions. There is no hospital certificate-of-need requirement. Insurance freedom is above average, and the state has recently allowed direct Tesla sales. The civil liability system has shown steady improvement over the past decade and a half.

Indiana has more personal freedom than most other conservative states. It was forced to legalize same-sex marriage in 2014 but never had an oppressive super-DOMA. Gun rights are fairly secure, especially for concealed carry, but the state has a stricter-than-federal minimum age for possession, dealer licensing, and a ban on short-barreled shotguns. Victimless crime arrest rates are fairly low, but the incarceration rate is a bit higher than average, adjusted for crime rates. Educational freedom is excellent, and the state posted major gains in 2011–12 with a new statewide voucher law and a limited scholarship tax credit law. The state’s civil asset forfeiture law is fairly good, though it is often circumvented through equitable sharing. Legal gambling is extensive and growing. Smoking bans have not gone quite as far as in other states. Cannabis freedom is virtually nonexistent, and alcohol freedom is only a bit better than average, as the state bans offsite, direct-to-consumer wine shipments and off-premises Sunday sales.

Policy Recommendations

  • Fiscal: Reduce debt and sales and income taxes by cutting spending on public welfare, libraries, and housing and community development, areas where Indiana spends more than average.
  • Regulatory: Allow independent nurse practitioner practice with full prescription authority, join the Nurse Licensure Compact, provide for a nursing consultation exception for interstate practice, and legalize independent dental hygienist practice. Combined, these reforms would have moved Indiana into a clear third-place finish on overall freedom in 2014.
  • Personal: Legalize happy hours, direct wine shipments, and Sunday alcohol sales. Combined, these reforms would have raised Indiana from sixth to fourth on personal freedom in 2014.
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