Louisiana’s Business Climate Is Bleaker Than Ever

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Today, there is a dire need for Louisiana to attract new and better jobs for its citizens. Unfortunately, the current governor’s administration is not working to make a more beneficial business environment.

When uprooting a business, starting a new endeavor or searching for your next expansion, there are a number of factors that determine where you move. Does the state have a favorable tax structure? Is the judicial system creating a fair system for businesses? Can the state’s infrastructure support your needs? Is there even a labor force that can fill your job postings? Unfortunately, none of those factors help Louisiana’s position within the business community. In fact, in just over a year since Gov. John Bel Edwards’ inauguration the state has been rated as the worst to do business.1 Under the governor’s administration none of these criteria will see significant upgrades or improvements to contribute to a more favorable ranking.

Under Governor John Bel Edwards, the government of Louisiana has been seen as one that is attacking businesses to overcome a self-inflicted budget crisis. In just over a year in office, the Governor has created the highest sales tax rate in the country raising it by 20 percent. He has created a seemingly endless stream of threats to raise taxes on the backs of job creators, including higher taxes on labor, professional services, gas tax increases and even a radical, European-style gross receipts tax. This dire situation create an environment based on two things a CEO hates the most – uncertainty and soaring unfounded axes.

In 2015, our state was rated as a top ten state for business by Chief Executive Magazine. Since that time, we have fallen more than thirty spots based on the governor’s litigious environment.2 The cost of operating a business is a key factor for any CEO or job creator, and excessive lawsuit abuse is another area where Louisiana leads the nation. “Louisiana has a reputation for plaintiff-friendly venue laws, permissive judges… the highest jury threshold in the nation, abuse of consumer protection laws and excessive jury verdicts,” American Tort Reform Foundation wrote in this year’s Judicial Hellholes report.3 These excessive lawsuits cost the state more than 50,000 new jobs every year. To put that into perspective, Louisiana lost approximately 10,000 oil and gas industry jobs between 2014 and 2015. Those jobs could have been replaced and others created if we stopped suing every business attempting to invest in here. The governor has even gone so far as to encourage parishes to launch a billion-dollar lawsuit against the oil and gas industry.4 If we want to create a business-friendly environment in Louisiana, we must prevent frivolous lawsuits and that begins with Governor John Bel Edwards.

Job creators need a robust infrastructure to conduct their business and Louisiana once again lags behind most of the country. Trucking companies need safe, smooth roads. Shipping companies require reliable railways and port access. All of these are issues that our state has been facing and failing to provide for its citizens – despite raising taxes and funds that are consistently diverted from road projects. The state is facing a $13 billion backlog of road and bridge projects.6 Our crumbling water system has been rated as a D+.7 No reasonable plans are being put forth by Gov. John Bel Edwards’ administration and that will ultimately lead to businesses continuing to look elsewhere for investment opportunities.

To attract employees and businesses to our state, there must be some assurance that the quality of life is meeting the demands of employees being asked to move. Unfortunately, Louisiana has been ranked as the fifth most dangerous state in the country. With the highest murder rate in the country8 and one of the highest rates of poverty,9 Louisiana doesn’t appeal to many outsiders as a hospitable, safe place to raise a family.

For any business looking to begin operations in a state, there must be a labor force that is educated and prepared for employment. Unfortunately, in Louisiana fewer citizens have a degree than nearly every other state, only 23 percent have completed undergraduate studies.10 Gov., John Bel Edwards has cut the TOPS program once11 and has declared his intentions to do so once again. For many students in Louisiana this is their only opportunity to receive a higher education as the state fulfills their tuition requirement on the contingency that they maintain a respectable grade point average.

The unprepared workforce, troubling tax structure, lack of public safety and crumbling infrastructure of Louisiana are all contributing to a poor sales pitch to businesses. For our state to rise above its current bottom-ranking business climate, there must be solutions delivered by our governor’s office. Unfortunately, with just over a year’s time to demonstrate leadership, we have yet to see any progress with no hope in sight.

Footnotes:

1 http://247wallst.com/economy/2017/02/18/why-louisiana-is-the-worst-state-for-business/

2 https://www.businessreport.com/article/louisianas-tumble-magazines-ranking-proves-litigious-environment-costing-state-thousands-jobs-nonprofit-director-says

3 www.judicialhellholes.org/2016-2017/executive-summary/

4 http://www.nola.com/environment/index.ssf/2013/07/historic_east_bank_levee_autho.html

5 http://thehayride.com/2017/01/its-beginning-to-look-like-louisianas-government-is-about-to-admit-failure-on-infrastructure/

6 http://www.theadvertiser.com/story/news/local/louisiana/2015/05/13/louisiana-travels-road-neglect/26989631/

7 http://www.wbrz.com/news/report-reveals-new-info-into-louisiana-s-crumbling-water-system/

8 http://www.nola.com/crime/index.ssf/2016/09/louisiana_tops_murder_rate_aga.html

9 http://247wallst.com/special-report/2016/11/14/the-most-dangerous-states-in-america-3/3/

10 http://247wallst.com/economy/2017/02/18/why-louisiana-is-the-worst-state-for-business/

11 http://www.nola.com/politics/index.ssf/2016/06/tops_louisiana_budget_cuts.html