A report studying economic freedom in all the states finds Ohio at an “unimpressive” ranking of 38 of 50 and sounds the alarm about the state’s public pension, saying it could require a bailout within a decade.
The Economic Research Center of The Buckeye Institute and Canada’s Fraser Institute on Monday released the study titled “Economic Freedom of North America 2018.” The authors are Dean Stansel, José Torra and Fred McMahon.
To create the report, the institutes took measurements of government spending, taxation and labor market restrictions in 2016.
Ohio’s ranking of 38 is down one spot from last year but better than its rank of 45 two years ago.
“For Ohioans, this report paints a concerning picture. Ohio moved up several spots a year ago, driven by Governor John Kasich’s tax reform efforts,” Dr. Andrew J. Kidd of The Buckeye Institute’s Economic Research Center said in a statement. “Yet, this year, Ohio has stayed in roughly the same position, taking up membership with the bottom third of economically free states. Ohio continues to lag behind many of its neighbors and, compared to last year’s rankings, is flat lining when it comes to overall economic freedom. When looking at Ohio’s rankings in specific categories, it is easy to understand why so many Ohioans struggle to achieve any form of economic prosperity.”
The institutes issued a caution about Ohio’s insurance and retirement payments as a percent of personal income. The researchers said the state was dead last in this category, adding:
This ranking highlights the looming crisis that Ohio faces if it fails to reform its retirement system. In a 2016 Mercatus Center report, researchers found that Ohio had only enough in assets to cover payments for the next decade. Unless Ohio reforms its retirement plans, mounting pension costs will require cuts to critical government services or sharp tax increases.
Other items of note included these rankings for Ohio:
- Government spending – 44th
- Taxes – 29th
- Labor market freedom – 34th
Ohio showed strong in top income tax rate and top income tax rate threshold at 11th of 50, the report said.
States that are more free include Pennsylvania, 26th, and Michigan, 34th. Less free states include West Virginia, 48th, and Kentucky, 49th, the report said.
One political observer said in an emailed statement that Ohio needs to make more strides in securing economic freedom for its residents.
“While we have made progress on Economic Freedom in Ohio, the repeal of Ohio’s Estate Tax being a great example, the facts don’t lie,” said Tom Zawistowski, president of Ohio Citizens PAC and We the People Convention. “We have a long way to go primarily due to Government overspending and the bite sales taxes take out of the pockets of Ohioans each year. We will be watching the incoming Governor and his team to see if they address either of those two issues.”
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