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Study Ranks Montana in Bottom Five States for Economic Freedom

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Photo courtesy of WTPfefferle/Flickr

With no sales tax and abundant land to run around in, many Montanans may be surprised that they have been placed near the bottom of the list for economic freedom in the United States.

A study, composed by the Center for Free Enterprise has given Montana an even lower score than it garnered for the same study in 2008.

“Montana is 44th in the nation and it is actually ranked below all of its neighboring states such as Wyoming, North Dakota and South Dakota, said Center for Free Enterprise Director and Associate Professor of Economics at Florida Southern College Derek Yonai. “The primary driver for that [low rating] is government spending. Government spending has been driving down the economic freedom score for Montana.”

Yonai said the study focused on the issues of property rights (whether or not eminent domain was easy for the state government to use), the size of the state government, the regulation of credit, and how difficult it is to open a business.

“Today, Montana is spending more money on goods and services than she did in 2008,” Yonai said. “There’s more payments for public pension and unemployment insurance today than there was in 2008. Other things that are driving down that economic freedom score include an increase in minimum wage costs and the percent of the public that are employed by the government, right now it is estimated that 14% of workforce is employed by the government.”

Some of the study’s main findings can be seen in their Montana release (seen below):

  • Montana’s overall economic freedom score has fallen half a point (-0.5) since 2008, yet still rose 1 spot from 45th to 44th.
  • Ranking 44th in economic freedom, Montana is lagging behind neighboring states including Wyoming (4th), South Dakota (5th), and North Dakota (26th).
  • Economic freedom in the United States has continued to decline: The average economic freedom score for U.S. states has dropped nearly one point (8.2 to 7.3—out of 10) in approximately just one decade.
  • Top Ten States for Economic Freedom: Delaware, Texas, Nevada, Wyoming, South Dakota, Colorado, Nebraska, Georgia, Utah and Illinois.
  • Bottom Ten States for Economic Freedom: New Mexico, West Virginia, Mississippi, Vermont, Maine, Kentucky, Montana, Arkansas, Hawaii, and Rhode Island.
  • Canadian provinces are beating out U.S. states in average level of economic freedom (Provincial average is 7.4 compared to 7.3 out of 10 for U.S. states.)

Derek Yonai:

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