(The Center Square) – Arkansas has a way to go on improving economic freedoms but has made headway in its regulatory policy, according to a new report.
The state fell in its overall ranking this year in the annually released Freedom in the 50 States Index of personal and economic freedom, published by the libertarian think tank and research organization the Cato Institute.
Arkansas placed 27th, down one spot from last year’s report. However, that’s up significantly from 10 years ago when it landed in the 36th spot in 2013, the lowest Arkansas has placed in the over two decades the index has tracked freedom in the 50 states. The highest Arkansas ranked was 14th in 2003.
Its worst scores from the index are in the personal freedoms category.
“Arkansas has ranked consistently worse than most other states on personal freedom, but at least it is no longer the second worst, as it was in 2014,” the report said. “If you’re pro-life, you think Arkansas is outstanding on personal freedom because of its extremely strict abortion ban, and it would be number nine on overall freedom. If you’re pro-choice, Arkansas falls a little further (one spot on overall freedom for moderate pro-choicers).”
Fiscally, Arkansas’ tax burden was average, but state taxes were above the national average while local taxes were way below, the report said. The state tax burden as a percentage of income is 7.8%. Working in Arkansas’ favor is the fact that debt is low, and while its tax burden spiked last year, that was the trend observed across the country and came after Arkansas reached a record low for its tax burden in fiscal year 2020, the report said.
The state’s highest scores came from the regulatory freedoms category and its “above average” labor market freedom, according to the report.
Where Arkansas again fell short in the index was in its criminal justice policies, with a crime-adjusted incarceration rate higher than the national average. The state was also faulted for its drug enforcement rate and suspension of driver’s licenses for offenses unrelated to driving.
But that contrasted with secure gun rights and loose alcohol laws. Additionally, universal school choice, enacted as part of the LEARNS Act earlier this year, is expected to improve Arkansas’ score in the personal freedom category in the future.
The report recommended the state cut its sales and use tax and roll back occupational licensing, among other things.
New Hampshire, Florida, South Dakota, Nevada, and Arizona were the top five states that scored highest for freedom. At the low end were Oregon, New Jersey, California, Hawaii, and New York.