New report ranks Utah as 20th freest state

(The Center Square) – An increased tax burden caused Utah to slip to 20th in the Cato Institute’s ranking of freest states in the U.S.

States are ranked based on fiscal and regulatory policies, as well as those impacting personal freedom in the libertarian think tank’s sixth edition of its Freedom in the 50 States report.

Utah ranked 14th in 2016, but 2020 saw the tax burden increase quite a bit in the state.

“We show a dramatic drop in state revenues with the onset of the Great Recession, which haven’t quite been replaced,” Cato said in the report. “In fact, further tax cuts were enacted in [fiscal year] 2014. But the state tax burden climbed a lot in [fiscal year] 2020 compared with the previous year and decade, moving higher to 6.2 percent, above the national average.”

However, local taxes remain low at 3.7%, just below the national average of 3.9%.

Despite the dip in fiscal policy ranking, Utah remained in the top half of states thanks to improved freedoms in regulatory policy and high marks for insurance freedom.

“Insurance freedom is among the best in the country with ‘use and file’ for most property and casualty lines, long-standing membership in the Interstate Insurance Product Regulation Compact, and no rating classification prohibitions,” the report noted.

Utah received high marks for personal freedoms on gun rights, education and campaign finance, and it ranked in the top spot for travel freedoms. Cato called the state’s control over alcohol and gambling “draconian,” however, with Utah ranking last in the nation on those issues.

Utah ranked higher than the national average for non-drug victimless crime arrests in the past but now has dipped below national averages, and its incarceration rate also has fallen. Still, drug arrests have risen and hit new highs.

The report highlighted a need to build cash reserves and work on tackling state debt. It also recommended doing away with occupational licensing for a slew of professions, including taxi drivers, chauffeurs, funeral attendants, and occupational therapist assistants.

New Hampshire tops the list of the freest states with Florida, Nevada, Tennessee and South Dakota rounding out the top five. New York is at the bottom of the list.

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