Iowa’s tumble in its overall freedom ranking from CATO Institute has continued as the Hawkeye State dropped to 34th in the latest ranking. Iowa ranked 10th in 2000 and got as high as ninth a couple of times.
However, as other states have improved, Iowa has fallen dramatically. Iowa has fallen four spots since 2021. The ranking is based on more than 230 state and local public policies.
CATO recommends Iowa reduce its government workforce and spend less on education, especially higher education, public buildings, hospitals, highways, parking lots and sanitation. CATO said Iowa spends more than average. The state could use savings from those reductions to cut property, sales, income and motor vehicle license taxes.
Repealing certificate-of-need requirements for new medical facilities and using robust and independent sunrise review requirements for new occupational licensing proposals would be a welcomed change. Iowa could overtake Kansas for first in regulatory policy with those reforms in addition to small reductions in the actual number of licensing restrictions.
Adopting universal Education Savings Accounts would strengthen personal freedom in the state.
CATO said Iowa has “long been a standout on regulatory freedom.” But its one of a few states whose fiscal situation has deteriorated during the last 10 years.
“As a result, its fiscal policy ranking has cratered,” CATO said.
State and local tax burdens are above average in Iowa. Iowans pay 11.1 percent of adjusted personal income to government, which is similar to Massachusetts.
While Iowa stands out on regulatory policy, CATO chastized Iowa for not doing as much as other states about eminent domain use for private gain.
CATO noted universal ESAs are coming, but also added private schools are “tightly regulated with mandatory state approval, teacher licensure and detailed curriculum control.”
New Hampshire is ranked first in the nation while Florida is second. South Dakota, Nevada and Arizona round out the top five.
New York is last. Hawaii is 49th. California, New Jersey and Oregon are 48th, 47th and 46th respectively.
You can read CATO’s full report on Iowa here.