Illinois 36th, Indiana 3rd in new state freedom index
Lack of school choice, a stifling regulatory climate and high taxes puts Illinois in the bottom third of the country on the First in Freedom Index.
Among the 50 states, Illinois ranks a paltry 36th in overall freedom, according to the John Locke Foundation’s First in Freedom Index. Neighboring Indiana was ranked third, bested only by New Mexico and Florida.
The independent think tank measured fiscal freedom, educational freedom, regulatory freedom and health-care freedom to create the index, which can be used judge the relative quality of each state’s policy climate. Illinois ranked in the bottom half of all four categories.
Illinois’ poorest showing in a major category came due to a lack of school choice – the state was ranked 41st in educational freedom, the worst in the Midwest. Indiana ranked third in this category.
Illinois also performed poorly in the fiscal freedom category, ranking 29th. Half of this measure was based on the business tax climate index from the Tax Foundation, which measures income, sales, property and payroll taxes. The partial sunset of the 2011 tax hikes on Jan. 1 undoubtedly improved Illinois’ ranking in this category, which stands as third best in the Midwest, but wasn’t enough to put the state in the top half of the country.
In fact, this ranking may be slightly inflated, as the variables used to measure the competitiveness of states’ workers’ compensation regulations did not take into account the relative cost of workers’ compensation by state. Illinois is home to the seventh-highest workers’ compensation costs in the country, due largely to relaxed “causation” standards regarding the injuries for which employees may claim damages. But the study, which used the Mercatus Centers’ “Freedom in the 50 States” for this metric, ranked Illinois 1st and 17th in the two measures of freedom related to workers’ compensation. A more robust measure may have knocked the state down even further.
An oppressive regulatory climate also contributed to Illinois’ lackluster showing. The state ranked 29th in regulatory freedom, second-worst in the Midwest behind Michigan. Neighboring Iowa ranked first in the country. Among the determining factors in this category were Illinois’ heavy occupational licensing restrictions and residents’ vulnerability to abuse of tort law.
Illinois also lagged behind neighbors in the health-care category, ranking 28th in the country while Indiana came in fifth. The state was weighed down by its use of Certificate of Need, or CON, laws. Via the report:
“These regulations require that medical providers must ask permission from state bureaucrats to build or expand an existing health facility or update major medical equipment. While CON was originally mandated by the federal government as a way to cut down on underused services and incentivize access to health care in underserved areas, it was deemed ineffective by Congress in the late 1980s. States now have the option to regulate medical services, supplies, and infrastructure. Those with strict CON parameters suppress competition, making health care more expensive for patients as well as limiting patient choice”
If nothing else, the study reaffirms the breadth of policy problems ripe for reform within Illinois’ borders. As state lawmakers should know by now, Illinoisans have no problem crossing those borders should neighbors offer the freedom necessary to foster economic opportunity.