The Mercatus Center released the latest Freedom in the 50 States report Thursday, giving a new and updated ranking of all 50 American states based on how their policies promote freedom in the fiscal, regulatory and personal realms.
The concept of freedom used in the report, the authors said, is that of individual rights.
"In our view, individuals should be allowed to dispose of their lives, liberties and property as they see fit, so long as they do not infringe on the rights of others," the study FAQ said. "The understanding of freedom follows from the natural-rights liberal thought of John Locke, Immanuel Kant and Robert Nozick, but is also consistent with the rights-generating rule-utilitarianism of Herbert Spencer and others."
Utah makes an appearance in the top 10 most free states for the first time this year, while states like New York, California and New Jersey remain firmly established as the least free states in the U.S.
Here's a look at the 10 highest-ranking states and the 10 lowest-ranking states on this year's personal freedom index.
>> Read Jay Evensen's perspective on the Freedom in the 50 States ranking
North Dakota jumped to the top of the freedom index this year, earning the title of the freest state in the U.S. According to the Mercatus rankings, North Dakota scores exceptionally well on regulatory and fiscal policy, while also scoring slightly above average on personal freedom.
The report recommends that North Dakota improve by reducing the size of the government sector to make it consistent with national norms, cut spending in certain areas, eliminate occupational licensing requirements for things like makeup artists and bill and account collectors, and prioritize crimes so as to lower the non-drug victimless crimes arrest rate.
South Dakota does better in economic than personal freedom while ranking as the second freest state overall.
According to the report, South Dakota ranks best among the states in terms of fiscal policy thanks to its low levels of taxation, prudent spending and debt levels. It also scores well on regulatory policy, but its personal freedom scores are lower thanks to its laws on things like marijuana, asset forfeiture and home school requirements.
Policy recommendations include reducing government employment, ending the sales taxes on food and reducing the "relatively high" arrest rate for victimless crimes.
Coming in as the third freest state, Tennessee fares better on economic freedom than on personal freedom, but with less disparity between the two than South Dakota.
Tennessee's strength is fiscal policy, the report said, with the fourth lowest tax collections in the country, a relatively low government debt ratio, relatively low government employment and about average spending.
Policy recommendations include reducing government spending on things like utilities via privatization and restructuring, reducing the number of occupations that require state licensure and relaxing the state's drug enforcement regime.
New Hampshire, which used to rank as the freest state in the nation, lost the title in 2010, as the 2009-2010 legislature hiked taxes and fees and used stimulus money and debt to increase government spending, the report said.
However, New Hampshire still claims the fourth highest spot in the freedom index due to things like its state and local tax burden, which rank seventh lowest in the country, and its scores on economic and personal freedom.
Policy recommendations include creating tighter criteria for the issuance of state and local debt, limiting what local governments can do to restrict new housing and expanding legal gaming beyond charity games.
As the fifth freest state in the U.S., Oklahoma does especially well on fiscal policy but slips — "like many Southern states" — on personal freedoms, the report said.
Oklahoma's low taxes and debt boost it in the freedom rankings, as do things like the state's regulatory climate and number of health care insurance coverage mandates and its right-to-work status.
Policy recommendations for the state include cutting spending and the size of the government workforce to fall in line with national averages and reforming eminent domain and asset forfeiture laws.
The 2009 and 2011 "most improved state" award winner, Idaho, scores well on economic freedom but poorly on personal freedom, thanks to its status as "an extremely conservative state," the report said.
After Wyoming, Idaho has the lowest government debt ratio in the U.S., and its tax burden, right-to-work status and occupational freedom standings help boost its ranking.
Policy recommendations include cutting government spending and employment, privatizing the state alcohol monopolies and adopting a license system.
Missouri has long been a relatively free state, the report said, and has consistently moved toward greater freedom — at least economically — over the last decade.
Missouri's generally low taxes, light gun control and "one of the least restrictive" alcohol regimes help the state in the freedom standings. The state ranks the best in the nation on tobacco freedom.
Some policy recommendations include bringing spending and local debt on things like policy and fire protection, health, hospitals and libraries more in line with the national average, as well as passing a right-to-work law.
Virginia fits the "red state stereotype" by ranking as one of the freest states in the U.S. economically, but struggling with its personal freedom rankings, according to the report.
The state performs solidly on tax burden, government spending, debt and regulatory policy. Its tort system is also reportedly one of the best in the country, and it is a right-to-work state.
Policy recommendations for Virginia include reducing health insurance mandates to the national average and reforming the victimless crime regime to make it consistent with the national average. The report also criticizes Virginia's gun control laws, marijuana laws, asset forfeiture laws and its spirits tax rate.
Although Georgia's "urbanizing" Southern state status makes for a mixed personal freedom situation, the state's rapid economic growth indicates its economic freedom environment, the report said.
Georgia's state and local debt ratio is one of the lowest in the country, its labor laws are "quite free," and the state has "one of the best court systems in the South." The state stumbles, according to the report, on things like marijuana, gambling, asset forfeiture, victimless crimes and same-sex partnerships.
Policy recommendations for the state include reducing government employment from 13 percent to 11 percent of the private workforce and permitting some form of for-profit gaming enterprises.
Utah joined the top 10 freest states for the first time after having jumped from 28th in 2001 to 23rd in 2007, 17th in 2009 and 10th in 2011, although some "idiosyncrasies" affect its performance in the rankings.
According to the report, Utah performs particularly well in the economic realm, but poorly in many categories under personal freedom. Things like alcohol regulations, effective tax rates on alcohol, gambling laws and tobacco laws bring the state down in the rankings. However, Utah's asset forfeiture laws are "considerably better than those of many of the surrounding states."
Policy recommendations include cutting spending on things like general administration and public buildings, eliminating occupational licensing for professions like tax drivers, chauffeurs and funeral attendants, and resisting the urge to raise cigarette taxes.
Mississippi kicks off the 10 least free states, according to the latest Mercatus Center ranking.
As what the report calls "the most conservative state in the Union," Mississippi is a mixed bag, scoring average on fiscal policy thanks to the state's dependence on federal grants, and scoring fairly well in some areas of regulatory policy and "terribly" in others. Marijuana laws in Mississippi are among the harshest in the country, the report said, while gambling is more tolerated and private and home school regulations are light.
Policy recommendations include clamping down on government employment and spending in areas such as health and hospitals, cutting sales and business income taxes, passing tort reform and reforming sentencing so as to reduce the incarceration rate dramatically.
West Virginia, as one of the bottom 10 states in overall freedom, has a long way to go, particularly on the economic side, the report said.
Although West Virginia has not acquired a huge debt burden from the state's mix of spending and relatively low tax rates, education spending is high and selective sales, fuel and utility taxes, and the corporate net income tax rates are all high. The state ranks as second worse in the U.S. in regulation, falling only behind California.
Policy recommendations include cutting state employment, reducing the corporate income tax and increasing educational freedom by loosening regulation on homeschoolers and no longer requiring kindergarten attendance.
Although Vermont's economic freedom score is "quite poor," it is nearly a top-10 state for personal freedom, the report said.
Fiscal policy rankings bring Vermont down on the personal freedom index, as the state has the fifth highest level of taxes in the country. Regulatory policy and things like tort abuse and labor market freedom are either below average or mediocre, according to the report. On personal freedoms, Vermont scores high thanks to its laws regarding same-sex civil partnerships, victimless crimes, open and concealed carry of firearms and drug enforcement rates.
Policy recommendations include "drastically" reducing state aid to schools, better protecting property rights by enacting eminent domain reform and decriminalizing marijuana possession.
Across-the-board deterioration in government debt, spending, taxes and employment pushed Maryland down the freedom rankings in 2009 and 2010, although the state remains better than average on fiscal policy, the report said.
According to the report, Maryland's largest failing comes in the personal freedom department, where it is the second-worst-ranked state. Strict gun control and marijuana laws drop the ranking, as well as "impositions" on personal freedoms like auto and road regulations, a ban on raw milk, private and homeschooling laws, gambling laws, high drug arrest rates, high tobacco taxes and a statewide smoking ban.
Policy recommendations include ending rent control and trimming spending on housing and community development, parking lots and corrections. The report also recommends lowering income tax rates.
From the perspective of regulatory policy and personal freedom, Illinois is one of the least free states in the U.S., the report said, but its fiscal policy ranks it in the middle with its dead-center average tax burden.
On fiscal policy, government spending has been increasing over time, and the report said certain areas, such as employee retirement, are "way out of line" with national norms. State and local debt make up 25.1 percent of personal income. For personal freedoms, things like the state's strict gun control measure hurt it, but things like home school regulations ("a case of benign neglect") help.
Policy recommendations include finding ways to reduce future liabilities for employee retirement, ending partisan elections for the state supreme court and decriminalizing marijuana.
Although Rhode Island has been "a relatively less free state" for some time, the report said, the state has been declining in overall freedom during the last decade.
Rhode Island performs better than average in spending, government employment and fiscal decentralization, but taxes and debt are "very high," and the state performs poorly in the regulatory realm. Eminent domain reform is, according to the report, "practically nonexistent." In personal freedoms, Rhode Island scores well but is still below average.
Policy recommendations include cutting spending locally on police and fire departments, and at the state level on employee retirement, unemployment compensation and public welfare. Eminent domain laws and other land-use regulations should also be reformed, and private school and homeschooling laws should be liberalized, the report said.
Hawaii scores poorly on all three dimensions of freedom, the report said, with one of the highest tax burdens in the country and "especially high" sales, utilities, individual income and motor vehicle license taxes.
The state government is interventionist in the regulatory policy dimension, the report said, while its zoning regulations are the strictest in the country and eminent domain abuse "remains totally unchecked." Personal freedoms are mixed, with restrictive gun control and gambling laws weighing on lower-than-average crime-adjusted incarceration rates and drug arrest rates.
Policy recommendations for Hawaii include reforming the tort system, legalizing some forms of gambling and cutting taxes while offsetting the change by reducing spending.
New Jersey experienced "significant deterioration" in both personal and economic freedom in 2007 and 2008, and although it began to rebound in 2009 and 2010, the state still stands as the third least free in the nation.
Taxes and debt are high in New Jersey, the report said, and the state's most significant flaw in regard to economic regulation is real property rights, which contribute twice as much to its negative overall freedom score as its entire personal freedom score. New Jersey's gun control laws affect its personal freedom ranking, and it is ranked as the worst state for travel freedom.
Policy recommendations include liberalizing travel regulations — which include seat belt enforcement, helmet laws, cell phone driving bans, open container laws, sobriety checkpoints and mandatory underinsured motorist coverage for drivers — and slashing property taxes.
California taxes and regulates more than most other states, the report said, but also "aggressively interferes" in the personal lives of its citizens, making it the second-to-last least free state in the U.S.
The budgetary categories in which California spends significantly more than the rest of the country include general administration housing and community development, utilities and employee retirement, the report said. Individual and business income taxes are also well above average. Zoning laws, eminent domain abuse, labor laws, health insurance mandates and occupational licensing also hurt the state's ranking.
In spite of the state's reputation for social liberalism, California's gun control laws, high incarceration rates, drug enforcement rates, smoking bans, gambling and traveling freedom all impact the state's personal freedom score.
Policy recommendations include cutting spending, enacting tort reform and expanding legal gambling.
New York — "by far the least free state in the Union" — has the highest taxes in the country, fares poorly in economic regulation and varies on personal freedom standings, the report said.
The state runs into problems with its debt status, ranking as the most indebted state, and labor laws are poor, according to the report. Eminent domain abuse is reportedly "rampant." On personal freedoms, gun control laws are "extremely restrictive," tobacco laws are "extremely strict" and cigarette taxes have led to the growth of a "dangerous" black market.
Policy recommendations for the state include cutting spending on police and fire protection, hospitals, housing and community development, public welfare, public transit and employee retirement. The report also recommends reducing all taxes, paying down the debt, abolishing rent control and slashing tobacco taxes.