State score low on freedom index

Pullman Washington-based Schweitzer Engineering Laboratories recently published its 2023 Index of Freedom report.

The report ranks all 50 states based on government efficiency, regulatory freedom and energy resiliency. The top-performing states for 2023 are Utah, South Dakota, North Dakota, Idaho and Nevada.

New Jersey, California, Maine, Vermont and New York are the worst-performing states, according to the report. Washington came in at 32 on the list (an improvement from 36 in 2022).

The report’s methodology for government efficiency, regulatory freedom, and energy resiliency breaks down multiple source reports on a weighted basis. For example, in energy resiliency, the report uses the Citizens Utility Board and EPA reports for affordability rankings (45%), reliability rankings (45%) and electric deregulation (10%).

The Schweitzer report focuses on states where they have physical operations, including Washington, Idaho, Indiana, North Carolina and Arizona.

Washington’s ranking at 32 rests on issues around government efficiency (ranked 33rd) and regulatory freedom (40th). The state ranked eighth in energy resiliency.

The report notes:

“Washington suffers from a challenging regulatory climate and poor labor rates, driven by some of the most progressive prevailing wage and minimum wage laws in the nation. While Washington has been buoyed by a lack of a personal income tax, a newly implemented 7% capital gains tax sets a dangerous and highly irregular precedent, as the Washington State Supreme Court characterized this tax as an excise tax and not an income tax, as does the IRS and every other state in the country. This ruling opened the door for more bad tax policy in the state.”

Washington’s energy resiliency score bolsters the state’s overall ranking with robust, reliable, affordable hydroelectric power. The report warns of the negative impacts of attempts to lessen or remove this critical power source.

Washington falls short compared to Idaho, which ranked fourth overall.

The state has improved overall due to a change in the state’s income tax to a flat tax on personal and corporate income. This also included rebates back to citizens.

Idaho also leads the nation in regulatory freedom, which has led to robust growth in the state. The report notes that energy resiliency has suffered because of reliability, which can harm businesses.

— Chris Corry is the director of the center for Government Reform at the Washington Policy Center. Email him at [email protected].