The situation could be worse; Pennsylvania could be the worst-performing state in a national ranking of "economic freedom."

Instead, the Keystone State finds itself perched above five other states - Illinois, Rhode Island, Connecticut, California and New York, based on a study conducted by the San Francisco-based Pacific Research Institute in association with Forbes magazine.

What's troubling is that 44 states have been found to have greater economic freedom, and that provides a picture of why Pennsylvania's business climate is not what state residents would like it to be, and why it is more difficult for this state to rebound from fiscal adversity.

The most economically free states are regarded as the best places to start a business or find a new job, because they have the fewest regulatory roadblocks and fiscal obstacles. The "U.S. Economic Freedom Index: 2004 Report" assembled by Pacific Research measures economic freedom in five broad sectors. They are fiscal, regulatory, judicial, government size and welfare spending.

The index also uses an economic model to measure the correlation between economic freedom and personal income. A 10 percent improvement in a state's economic freedom has been found to yield, on average, a one-half percent increase in annual per capita income.

According to a report in the Pennsylvania Manufacturers' Association Bulletin, the analysis of the states covered 143 variables, including such items as tax rates, occupational licensing, state spending, environmental regulations, right-to-work and prevailing-wage laws, and income redistribution.

The findings derived from the study help promote an understanding of how economic freedom has a tangible effect on Americans' daily lives by its impact on their financial bottom line.

The index rates Kansas as the most economically free state. Others in the top five are Colorado, Virginia, Idaho and Utah.

That doesn't mean there should be an exodus of Pennsylvanians to those five states, but the study's findings are justification for pause as to what Pennsylvania is doing wrong - and for contemplation of how the Keystone State could do better.

If this state is to show better results on evaluations such the U.S. Economic Freedom Index, the initiative must come from state government in Harrisburg, the commonwealth's guiding force, which, unfortunately, merits too many bad marks for below-par performance. Unfortunately, the information measured and the complexities involving the study's findings ensure that Pennsylvania will remain at the tail end of the list for the indefinite future.

Pennsylvania's current economic-freedom situation evolved over decades. It will take an extended era of bipartisan hard work and cooperation, coupled with an eye toward high-tech and other evolving technologies, to have any possibility of making the state a business and jobs mecca in the way Pennsylvanians would want it to be.

- J.R.K.