American Federalism and the Free State Project


While all eyes are on Washington, D.C. to see what comes out of the Obama Administration and the new Democratic Congress, a different political scenario is playing out in each American state. Under the American federal system, states vary quite substantially on a number of public policies. Some states have income taxes and others do not. Some states ban smoking in all public places, workplaces, and restaurants, and others do not ban it at all.

While most states avoided the fiscal profligacy of the federal government over the past eight years, the economy and recent over-spending are hitting some states harder than others. My own state, New York, is facing a $15 billion deficit, and the governor is pushing 137 new or increased taxes or fees to close it.  New Yorkers already “enjoy" the second highest state and local tax burden in the country, at 11.7% of personal income.  Meanwhile, New Hampshirites pay only 7.6% of income to state and local governments, and the rate in Alaska is lowest of all: 6.4%.

In a forthcoming study published by the Mercatus Center, entitled Freedom in the 50 States: An Index of Economic and Personal Freedom, co-author William Ruger and I discover that New Hampshire, Colorado, and South Dakota outpace all others on both “pocketbook" and “lifestyle" freedoms considered together, while New York is by far the worst. We argue that the outliers at the bottom and the top owe their status not to a marked surplus or dearth of libertarian ideology in the voting populace, but to unique institutions, such as New Hampshire’s world’s-largest legislature (in terms of voters per legislator) and elected executive council, and Colorado’s Taxpayers’ Bill of Rights (now suspended).

Taking advantage of the powers that states enjoy to set many of their own economic and social policies, the Free State Project proposes that classical liberals and libertarians move to a single, low-population state to advance the idea of strictly limited government and robust individual freedom. The idea is that a few thousand savvy activists can leverage many more votes. The state they’ve chosen? New Hampshire. (Full disclosure: I’m one of them, although I don’t yet live in New Hampshire.) So far several Free Staters have been elected to the legislature, and about 500 have moved to the state. If this “freedom migration" continues, American politics might get much more interesting.

Guest author Dr Jason Sorens is Assistant Professor, Dept. of Political Science, University at Buffalo, SUNY