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Lack of Freedom Limits Delaware’s Prosperity

 By: Jane Brady, Chair, A Better Delaware

Recently, the Cato Institute did a study on freedom in each of the 50 states, measuring economic freedom and personal freedom indicators. The Cato approach is more to the libertarian view of government intervention, and I part ways on the issues of marijuana and some incarceration policies, but the standard they apply is consistent: less government interference through regulation, taxation, and social policy means more freedom.

The study measured each state on multiple criteria over the period from the year 2000 to 2023. Delaware did not fare well, and ranked, overall, 44 out of 50. Indeed, the report noted that Delaware had an “all around poor performance” on all three dimensions of freedom that were measured.

One measurement of economic freedom was fiscal policy, such as the tax burden on citizens and businesses, how much of the budget the government “consumes” and how large the government workforce is. By their measure, the states with lower taxes and smaller government rank higher, and higher is better. Delaware is at the bottom and ranked 47th out of the 50 states. Our tax burden is high, and our overall tax burden is worse than average, about 12.7% of adjusted personal income. The State of Delaware is our largest employer, and a huge percentage of our budget goes to government programs. In fact, of all the categories, this is Delaware’s worst performance.

The second measurement of economic freedom was regulatory policy, including consideration of such factors as land-use restrictions, healthcare, labor regulations, like occupational licensing requirements, and policies related to the ease of bringing lawsuits. They compare the regulations in the states to the state and federal constitutional guarantees. When the regulations restricted those guarantees the impact of that restriction was weighed as greater than others. Delaware fared a little better in this category coming in at 33 out of 50, giving us an overall economic freedom rating of 42. But the authors noted that much of Delaware’s “touted advantage of corporate laws now is significantly overstated.” Our business climate is not what it once was. And the report noted our certificate of need requirements for health care facilities.

The evaluation of personal freedom included such factors as incarceration rates, gambling freedom, gun rights, tobacco freedom, education choice and marijuana freedom. Delaware ranked number 43 in the area of personal freedom, even with our expansive marijuana, marriage, and abortion laws. That means that a lot of our personal decisions are regulated by the government in Delaware. Our land-use and energy freedom has declined because of an aggressive, renewable portfolio standard.

We are ranked below average on gun rights. Our laws on gambling, and our expanded legal sports betting are rated high. Our civil asset forfeiture law is tied for the worst in the country with few protections for innocent owners of property seized by law enforcement. Everyone should care about these issues. Importantly, fiscal, and regulatory policies affect specific groups, certain types of businesses, or particular types of transactions, but personal freedom measures government intervention that affects every citizen.

A Better Delaware advocates for lower taxes, less regulation, and more open and transparent government. We believe that the gross receipts tax and transfer taxes on real estate transactions should be lower. We believe the obstacles to small businesses forming and thriving should be removed, and we believe that economic prosperity is adversely affected when government is the largest source of employment and contractual work in the state. We believe in school choice, and advocate against a certificate of need requirement.

A Better Delaware also advocates for transparency and accountability in government. While it is important to know the numbers in this report and to identify the issues holding Delawareans back from better economic success, it is critical that you can know the rules by which to seek and implement any change. Government transparency and accountability are essential to assure an informed citizenry and a responsive elected government.

I encourage everyone to read the report and to consider how government intervention has affected your life and work. Then, contact your elected officials and tell them you want more freedom, fewer taxes, and a more open and transparent process in our government so you can know what action is being considered and how you might affect it.

Jane Brady serves as Chair of A Better Delaware. She previously served as Attorney General of Delaware and as a Judge of the Delaware Superior Court.