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Videos: Ten most free American states -- and why Colorado is falling

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How can freedom be quantified? The Mercatus Center at George Mason University has tried to do just that with Freedom in the 50 States, a project that attempts to combine rankings for economic and personal freedom to determine which American states are the freest -- and using its metric, whose ideology (or lack thereof?) can be read a number of different ways, Colorado is falling, and falling fast. Look below to count down the top ten, complete with graphics, analysis excerpts and videos for each -- and then continue to see where Colorado wound up and why. Number 10: Utah Utah joins the top 10 freest states for the first time, having moved up in each year coded for this book--from 28th in 2001 to 23rd in 2007 to 17th in 2009 to 10th in 2011. As one might expect, the state performs better in the fiscal and regulatory policy dimensions than on personal freedom, and certainly has some idiosyncrasies that affect its performance.

Utah performs particularly well in the economic realm, ranking eighth out of all the states. In terms of fiscal policy, Utah remains a low-tax state with better-than-average fiscal decentralization and government employment. However, the state could do a lot better on spending and debt....

Number 9: Georgia Georgia is an urbanizing Deep South state, which makes for a decidedly mixed personal freedom situation, but the state's rapid economic growth reflects a strong economic freedom environment.

The state and local debt ratio is one of the lowest in the country, at 15.6 percent of income. Its overall tax burden, at 8.6 percent of personal income, is as low as Florida's, and the state is relatively fiscally decentralized. However, government employment, at 13.0 percent of private employment, ranks only about average....

Continue to keep counting down the ten most free American States -- and see where Colorado landed. Number 8: Virginia Virginia is one of the freest states in the country, ranking eighth overall. However, it fits the red state stereotype in that it fares better in terms of economic freedom (6th) than personal freedom (38th).

Virginia's tax burden, government spending, and debt are all well below national averages. It is also fiscally decentralized compared to other states. However, state and local government employment is roughly at the national average....

Number 7: Missouri Missouri has long been a relatively free state, and it has consistently moved in a direction of greater freedom, at least greater economic freedom, over the last decade. The freedom index registers a slight downturn in 2009--10, but this was driven almost entirely by a decline in the liability system score, which might be the result of sampling error rather than actual policy change.

Missouri has generally low taxes (at 8.3 percent of personal income), government spending (with consumption plus subsidies at 10.4 percent of income), and public employment (at 13.0 percent of private employment), and the state is somewhat decentralized. The only fiscal category in which Missouri fares poorly compared to the rest of the country is debt, which rose from 18.5 percent of income in FY 2008 to 20.3 percent of income in FY 2010....

Continue to keep counting down the ten most free American States -- and see where Colorado landed. Number 6: Idaho As an extremely conservative state, Idaho scores very well on economic freedom but poorly on personal freedom. Idaho wins the title for "most improved state" between the years 2009 and 2011. All that improvement came from enhanced economic freedom, especially regarding fiscal policy.

After Wyoming, Idaho has the lowest government debt ratio in the United States. Its tax burden of 8.2 percent is also among the lowest, and it has fallen from 9.6 percent since 2001. However, state government is overly dependent on federal grants, and as a result government consumption plus subsidies and government employment are both above average (11.7 percent of personal income and 14.1 percent of private employment, respectively)....

Number 5: Oklahoma Oklahoma is the fifth freest state in the country. It does especially well on fiscal policy (ranking fourth) but slips, like many southern states, on personal freedom (ranking 31st). The Sooner State also improved more than any other state except for North Dakota over the last decade.

In terms of fiscal policy, Oklahoma enjoys particularly low taxes and debt (7.4 percent and 14.0 percent of personal income, respectively). However, it does not equal this superior performance on spending, where it is a full standard deviation worse than average (at 13.0 percent of personal income). One of the reasons for this is that the Oklahoma state and local governments have bloated payrolls amounting to 16.5 percent of the private workforce. Oklahoma is also fairly fiscally centralized....

Continue to keep counting down the ten most free American States -- and see where Colorado landed. Number 4: New Hampshire By the end of 2010, New Hampshire was no longer the freest state in the nation. The 2009--10 legislature hiked numerous taxes and fees and used one-time stimulus dollars and new debt to fund a significant increase in government spending.

In FY 2010, the state and local tax burden was 8.0 percent of personal income, seventh lowest in the country, compared to an FY 2000 figure of 7.5 percent, then lowest in the United States. State and local government consumption and subsidies stood at 9.0 percent of income in 2010, compared to 7.3 percent in 2000. Debt was at 18.8 percent of income, compared to 16.7 percent a decade earlier. While New Hampshire still scores sixth in the United States on fiscal policy, the famed "New Hampshire advantage" has dissipated. It is too early to tell whether the 2011-12 legislature, which enacted swinging spending cuts, has undone the damage....

Number 3: Tennessee Tennessee is one of the freest states in the country, placing just behind the Dakotas at the top of the rankings. Like the Dakotas, it fares better on economic freedom than personal freedom. However, the disparity between its economic and personal freedom scores is not as extreme as in South Dakota. The state's level of freedom and relative ranking have slipped slightly since 2001, when it was second in overall freedom.

Tennessee does particularly well in fiscal policy. The state has the fourth lowest tax collections in the country (at 7.5 percent of personal income). It also has a relatively low government debt ratio and about average spending (though outlays for utilities are high). Government employment is relatively low and the state is among the most fiscally decentralized....

Continue to keep counting down the ten most free American States -- and see where Colorado landed. Number 2: South Dakota

Number 1: North Dakota North Dakota, according to the freedom index, is the freest state in the United States. It scores exceptionally well on regulatory and fiscal policy. Moreover, North Dakota scores slightly above average on personal freedom. It is also the state that improved the most over the last decade.

Like its neighbor to the south, North Dakota's score is exceptional on fiscal policy. It has very low taxes and government debt. However, its spending is uncharacteristically high. Like Oklahoma, the government has a bloated payroll that represents 15 percent of the private workforce....

Continue to see where Colorado wound up in the list of the most free American states, and learn more about how the numbers were crunched. Number 19: Colorado

Colorado used to be a moderately conservative state, but it has moved left over the last 12 years. Its freedom score is one of the "most worsened" in the country over the 2001 to 2011 period.

Still, Colorado scores better than average for its fiscal policies and is the second most fiscally decentralized state in the country, with localities raising 50.7 percent of all state and local revenues. However, its state and local debt burden is high, at 23.6 percent of personal income, an increase of 3.6 percent in four years. From FY 2006 to FY 2010, Colorado's measured tax burden increased from 8.3 percent to 9.2 percent....

About Freedom in the 50 States:

Now in its third edition, Freedom in the 50 States presents a completely revised and updated ranking of the American states based on how their policies promote freedom in the fiscal, regulatory, and personal realms.

This edition employs an enhanced methodology that makes it an even more comprehensive index than in past editions. Improving on their previous attempts to measure freedom, authors William P. Ruger and Jason Sorens use far more variables in this edition, including new variables related to economic freedom. In fact, more than 200 policy variables and their sources are now available to the public on this website.

Scholars, policy makers, and concerned citizens can re-weigh every policy and create customized indices of freedom or download the data for their own analyses. In the 2013 edition, the authors have updated their findings to:

• include a new technique for aggregating policies into a freedom index based on "freedom value" (the estimated dollar value of each freedom affected to those who enjoy it);

• improve and expand measures of business regulation, including new variables for land-use, professional, and insurance regulations; and

• present results for more sophisticated statistical analyses of freedom's effects on migration and growth than those in previous editions.

In addition to providing the latest rankings for 2011, the 2013 edition builds on the data and rankings from previous editions for 2007 and 2009 and, for the first time, also includes data and rankings for 2001, highlighting changes in economic and personal freedom over the past decade.

More from our News archive circa July 2009: "Denver: The manliest, drunkest, business-iest, happiest, safe-sex-having-ist city in America."

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