Which is sort of good news.  Except that a couple of years ago, we were #2.

I’m talking about the Mercatus Center’s Freedom Index. If you think you see a pattern in that map, by the way, your eyes are not deceiving you.  Blue states tend to be darker, red states tend to be lighter; the authors provide a few charts correlating liberal/progressive vote share with the different measures they use that comprise the index.  Since the index lags events by two years, we still have a couple more years of all-Democrat rule to go, so things are likely to get worse for the Centennial State before they get better.

So, for the record, here’s how Colorado has fared in the 2009 and 2011 surveys:

The authors have a pie chart in the back of the report showing how much weight they gave to the individual issues comprising each index.

It’s not hard to see where Colorado’s fallen down, and where it’s held up.  Fiscal policy has been restrained by TABOR, and by a peculiarity that assigns greater freedom to greater revenue decentralization.  In Colorado’s case, that may be a bit deceptive, as the state still mandates a fair amount of local spending.  On the other hand, they do take a hard look at debt/personal income, and Colorado’s definitely headed in the wrong direction there.  (The state, localities, and special districts – I’m lookin’ at you, FASTER – have all been violators here on that score.)  In fact, spending as a percentage of personal income did increase over the two years covered, but the index was held in check by lower government employment as a percentage of the total workforce.  When the survey comes out for 2009-2010, those trends are certain to reverse.

Personal freedom has seen both gains and offsetting losses, and you can see that the rank there improved more by comparison than by actual objective improvements.  Reductions in alcohol taxes were offset by increased local restrictions on guns, but other than that, little changed from 2007 to 2009.

The authors blame the passage of a minimum wage law for much of the Regulatory Policy decline – and that really has fallen in absolute terms. Looking at the actual data, it appears that stricter worker’s compensation requirements, along with a higher percentage of workers being covered, is responsible for the rest of the decline in labor freedom.  Health freedom also declined as a result of greater requirements placed on the small group market and increased mandates on policies.

The authors admit to a certain amount of subjectivity in their metrics.  They use a lot of parametric tests (1 = by land, 2 = by sea, etc.), and some of the cutoffs are judgments calls.  But there’s no reason to think they’re gaming their own system, looking for inconvenient cutoffs that would disadvantage some states while helping others.  And there’s certainly no reason to think they’re trying to rein in Colorado’s previously stellar rankings.

Also, remember that Mercatus could fairly be characterized as an economic-based, libertarian-minded center.  They tend to see public policy more as an economic measure than a social one, leading them to reflexively oppose so-called “victimless crimes,” and count, for instance, mandatory legal residency checks as an impingement on freedom, where others might see them as the price of maintaining a level of order and civility in society.

Still, it’s dismaying to see Colorado slipping in these rankings, especially when the slippage is due almost entirely to increased fiscal irresponsibility and increased regulatory burdens, practically designed to discourage job creation.  If the states are the laboratories of democracy, Colorado’s recent experiments have produced some pretty decisive results.