Report ranks North Carolina as 16th freest state in the U.S.
North Carolina ranks as the 16th most free state in the country in the CATO Institute’s latest index measuring states’ freedom.
The report by the libertarian think tank found North Carolina has a “reasonably good economic freedom profile and an even better record on personal freedom.”
According to CATO, North Carolina has improved in fiscal policy over the past nine years but has dipped slightly in regulatory policy.
State and local taxes fell between fiscal year 2011 to fiscal year 2020.
State taxes dropped from 6.1% of adjusted personal income to 5.6%, and local taxes fell from 3.5% of income to 3.2%, which is below the national average. On the other hand, North Carolina’s government consumption and employment fell but still stayed above the national average. The state’s debt and financial assets are also below the national average at 10.2% and 9.5%.
To improve fiscal freedom, CATO analysts recommend that North Carolina cuts spending on hospitals and build up its rainy-day fund or trim individual income taxes further. Lawmakers increased investments in the state’s rainy-day fund and cut billions of dollars in taxes in the current biennium budget.
According to CATO, North Carolina’s weak spot is occupational freedom. Licensing requirements have “consistently” grown, they said. North Carolina is also one of the worst states for insurance freedom.
The state scores low on the scale for alcohol freedom because of its Alcoholic Beverage Control (ABC) Commission Board. The North Carolina ABC Commission, a state agency, has control over the sale, purchase, transportation, manufacture, consumption and possession of all alcoholic beverages in North Carolina, along with 171 local boards. The local boards get a portion of the profits from the alcohol sales.
There are also “excessive controls” on the housing supply, CATO analysts said, and gun rights are more restricted than other Southern states.
To improve the regulatory environment, CATO said North Carolina should eliminate all rate regulations on property and casualty insurance, and lift restrictions on direct-to-consumer auto dealerships.
CATO analysts also recommend legalizing internet sports betting, which is considered a personal freedom. The Legislature has considered legalizing different forms of sports betting but to no avail. In August, the Senate approved Senate Bill 688, which would have legalized sports gambling on electronic devices and at selected locations across the state. The measure did not make it to a House vote.
On a positive note, the state ranks No. 6 in educational freedom, No. 5 in tobacco freedom and is No. 1 in marriage and cable freedom.
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