Welcome to the Goldilocks State.
According to the libertarian Mercatus Center at George Mason University, North Carolina ranks No. 24 out of 50 states on issues related to fiscal, personal and regulatory freedom. Mercatus sees freedom through the prism of the Austrian School of economics, which for the lay person means it’s not unlike policies advocated by former U.S. Rep. Ron Paul, R-Texas.
For North Carolina, the men behind the study — Profs. Walter P. Ruger and Jason Sorens — made a few recommendations. One is to cut spending on hospitals by possibly privatizing them; cut business, income and sales taxes; eliminate rate requirements on health and auto insurance and abolish the state liquor monopoly.
As what tends to happen with these types of studies, policy preferences and what’s considered more important cut across traditional left-right ideological lines.
During one of the discussions on privatizing the Alcohol Beverage Control system in 2010, former Gov. Bev Perdue came out against it. The N.C. Budget & Tax Center, a project of the progressive N.C. Justice Center, urged her to stick to that position.
“Privatizing state services often has long-term fiscal consequences that aren’t properly accounted for,” Alexandra Forter Sirota, director of the BTC, said at the time. “Policymakers must ensure that in their efforts to close the shortfall that are not creating problems for the state down the road.”
Social conservatives tend not to see privatization as a good thing, since it can lead to a growth of liquor stores and expanded hours of sales. Beer and wine wholesalers don’t want the competition. These dynamics are part of what killed Virginia Gov. Bob McDonnell’s priority of doing away with his state’s liquor monopoly.
The amount of revenue generated from state liquor stores can also be a deterrent, especially when government budgets are tight.
Sorens said elected officials need to make their target narrow to avoid McDonnell’s mistakes.
“I would say, try not to do too much at once,” Sorens said. “Washington successfully privatized its state liquor stores, and the way it did it was to make it revenue neutral. So, they privatized the stores, but enacted high taxes so the state wasn’t losing money.”
Gov. Pat McCrory initially wanted to privatize the system, but walked back his comments a month out from Election Day, saying he had other aspects of state government that needed his attention first.
And while hospital privatization doesn’t look likely on the horizon, efforts are underway in the state General Assembly to reform insurance laws.
Because drivers are legally required to have some type of car insurance, and because residents with lower incomes can be priced out of the market, the state uses tight regulatory control to make sure complying with the law isn’t unfairly detrimental.
Currently, there is a state program to subsidize low-income drivers so they can afford coverage. Insurance companies, however, are pushing for a change.
“What a lot of other states have done is relax regulations on rates, and allow car insurers to price policies according to the risks posed by individual customers,” Sorens said. “Sometimes that’s not politically popular, but that helps get rid of this residual market of people who don’t get policies.”
Where Mercatus knocks the state on personal liberty is on tough laws against marijuana, but Sorens said the criminal justice system in North Carolina is comparatively good compared to other Southern states.
“North Carolina does better on criminal justice policy than most of the South,” Sorens said. “It doesn’t have an incarceration rate that’s really much higher than the national average. But, as we note, there’s been a little bit of a decline on our index of criminal justice policies. It’s hard to say what is causing that.”
For instance, having a statewide indigent defense program would be a positive, while underfunding that same program while demand grows, which was documented in the March 25 edition of The Free Press, would be a negative.
The bottom line, which the authors of the study will readily admit, is freedom is a subjective concept. This report details policy analysis and recommendations from one point-of-view. For instance, Republican efforts in the General Assembly to cut back early voting and one-stop voting wouldn’t count, because Mercatus views voting as an opportunity to take part in a collective act.
The personal freedoms it takes into account, Sorens said, were the ability to act as an individual.
Also, there’s the issue of weighting policies according to preference. As Matt Yglesias points out in his Friday story in Slate, weighting makes a real difference. North Dakota, which recently moved to implement the most restrictive abortion ban in the country, is the overall No. 1 state in the study.
Other states, like Mississippi, have pushed similar policies, but reproductive rights receive little weight in the study, while it gives a higher priority to deregulation of homeschooling.
“Some of the problem here arise from arbitrary weighting of different categories in order to simultaneously preserve libertarianism as a distinct brand and also preserve libertarianism’s strong alliance with social conservatism,” Yglesias wrote.
He went on, “Consequently, a gay man’s freedom to marry the love of his life is given some weight in the rankings but less than his right to purchase a gun with minimal hassle."
Taken in the total, from left, right and center, how free a person is can be largely determined by that person themself.
“We have a certain conception of freedom,” Sorens said. “We’re aware that’s not the same as everyone else’s.”
Wes Wolfe can be reached at 252-559-1075 or wes.wolfe@kinston.com. Follow him on Twitter @WolfeReports.
Selected rankings for North Carolina according to Mercatus freedom study:
- Overall: 24
- Fiscal: 25
- Personal: 14
- Regulatory: 14
For more information go to freedominthe50states.org.