New York ranks dead last among the states in Forbes magazine’s U.S. Economic Freedom Index, a study to be published today that considers the effects of more than 140 variables, including taxation, tort reform, and environmental regulations, in an effort to determine the amount of freedom a state’s average taxpayer has and its effect on income.

The study was conducted by a policy group with a free-market orientation, the Pacific Research Institute. It is Forbes’s second national survey of economic freedom. Forbes, which has its headquarters in Manhattan, also publishes the Index of Economic Freedom, a global analysis of the world’s economies.

In the first national study, published five years ago, New York also ranked last. Kansas this year is ranked no. 1. In the 1999 study, Idaho finished first.

The study defines economic freedom as individuals’ right to pursue the interests that best promote their well-being. The study says the states that have the most economic freedom are those that offer the fewest obstacles, in terms of taxes and regulation, to starting a business or finding a new job. The ranking compared the states based on what was termed “government intervention” in such areas as fiscal policy, welfare spending, size of government, regulatory climate, and the judiciary.

Any chance that New York had for getting out of the cellar ended during the 2003 legislative session, when several taxes were increased, including the capital gains, personal-income, and sales taxes, according to the study. Also contributing to New York’s low ranking was its heavy spending on welfare – a category where it ranked 50th. The state did slightly better compared to its peers in terms of the regulatory burden placed on businesses, coming in at 42nd. An analysis of the state’s fiscal prudence ranked it 47th.

A call from The New York Sun to a spokeswoman for the Empire State Development Corporation was not returned.

In contrast, Kansas ranked first in the survey by cutting spending and in the implementation of more efficient business practices in state government, leading to a combined budget savings of more than $1 billion. That fiscal discipline led to a balanced budget despite a difficult economic climate, the state’s governor, Kathleen Sebelius, a Democrat elected in 2002, wrote in a foreword to the study. Kansas was propelled to its first-place finish – it was 10th in 1999 – by its high rankings in the categories of welfare spending (it finished second) and regulatory climate (it finished fourth).

With the exception of New Hampshire, the Northeast is the most economically oppressive area to launch a business or seek work, according to the study. Joining New York in the nether regions of the rankings for the second time are Massachusetts, New Jersey, Pennsylvania, Rhode Island, and Connecticut. A co-author of the study, Lawrence McQuillan, said the Northeast’s population density makes it easier to develop and implement regulations here. The state ranked 49th in the survey is California.

Mr. McQuillan acknowledged the obvious political dimension to the ranking of both the top 10 and the bottom 10. In this month’s election, eight of the top 10 states in economic freedom went for President Bush, and nine of the bottom 10 went for Senator Kerry. Mr. McQuillan said the divide was representative of long-standing differences in both the political philosophies and the traditions in the states’ legislatures. Moreover, the prospect for upward mobility in the rankings is slim, he said, given the sway of unions and various other special-interest groups with the legislatures of New York and California.

“I’m hesitant to say that having a Republican governor and legislature is a silver bullet, but it does make it more probable that these issues will be seriously considered,” Mr. Mc-Quillan said.

The research institute’s Mr. McQuillan said another factor keeping New York, Connecticut, and New Jersey ranked low is the presence of the financial-services industry, in which average incomes can be well into the six figures, depending on the sector. The huge employment presence and the large tax base provided by Wall Street firms and workers offer relatively little incentive for those state governments to consider politically unpopular spending cuts or tort reform. Without the ready cash cushion that Wall Street provides, he said, the tri-state area’s governments would have to offer much more economic freedom to attract and retain potential employers.

The study concluded that the cost of restricting economic freedom is high. The study said that if all states were as economically free as Kansas, the average American worker would experience a 4.42% increase, or $1,161 gain, in annual income. Over a 40-year working life, assuming an interest rate of 3%, that would amount to $87,541 in lost income.

Further, Mr. McQuillan said restrictions on the economic freedoms of the high-wage residents of the Northeast and California would contribute to lost income of about $125,000 over a lifetime.

The lost income is attributable to both higher individual tax rates and fewer opportunities for advancement because of the smaller job pools. By analyzing data over a five-year period, the study concluded that a 10% improvement in a state’s economic freedom score would return, on average, about a 0.5% boost to annual income per capita. The study said workers are voting with their feet, with the top 10 states gaining population in the last five years, while the bottom 10 have been losing residents.