Analysis

Ohio performs poorly in nearly every conceptual area. Spending and taxation are higher than average, with administration, education, and social-service spending especially high as a percentage of personal income. On the plus side, government debt is below average. Ohio, like three other states, does not allow private workers’ compensation insurers. However, unlike North Dakota and Wyoming, it does allow employer self-insurance for workers’-compensation. The state’s occupational-licensing regime and level of health-insurance coverage mandates are decent. Ohio has improved its eminent-domain regime, but further reform is warranted. Its liability system is only average. On the other hand, Ohio’s asset forfeiture laws are quite good, with the state more than a standard deviation better than average. It could improve even further, though, by shifting the burden of proof to the government. Gun-control laws are relatively poor, though not extreme as in the case of states like Illinois or California. In fact, Ohio allows open carry without permit. The state authorizes sobriety checkpoints but does not mandate motorcycle helmets. Marijuana laws are liberal overall, but cultivation and sale sentencing could be reformed. Most gambling is illegal. Homeschooling regulations are unreasonable, including teacher licensure and mandatory state approval of homeschool curricula. However, private-school regulations are lighter. Draconian smoking bans are in place and cigarette taxes are above average. Beer and wine taxes are reasonably good but the spirits tax is fairly high.

Policy Recommendations

1. Aggressively reduce taxes, especially given that tax revenue as a percentage of personal income is almost a whole standard deviation higher than the average. We find that Ohio spends much more than the national average on financial administration (mostly at the state level) and on judicial, legal, and “other governmental” administration (mostly at the local level); thus, we particularly recommend cuts to these areas.
2. Continue reforming eminent-domain laws.
3. Look at Indiana as a model Rust Belt state and reform Ohio’s regulatory system in line with that model. For instance, consider rolling back occupational licensing and allowing competition in the utilities.