Louisiana’s Economic Landslide

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Louisiana’s 5.9% unemployment rate is the fourth highest in the nation. There are more people in Louisiana looking for work than not.1 This is despite the fact that, at the start of the decade Louisiana was enjoying rapid growth and was seen as a rising economy and a state that offered a lot to prospective business owners.2 Today, under the policies of Gov. John Bel Edwards, the state is developing a reputation for attacking job creators and is becoming a place consistently ranked as one of the worst states for businesses.3

In just over a year all of this progress changed for the worse. Before Gov. John Bel Edwards took office, Louisiana was a top ten state for business.4 Now in his second year in office, Louisiana has been ranked as the worst state in the country for business.5

Our state’s economy saw significant growth following the destruction of Hurricane Katrina. While the destruction was catastrophic, the rebuild effort served as an economic springboard for Louisiana. The state saw an influx of money from federal grants, tourism dollars and the reconstruction across South Louisiana. During this time, the eyes of the world were on Louisiana and the state government under Govs. Blanco and Jindal capitalized on the positive cash flow by instituting reforms with the goal of a more prosperous and business-friendly state.

So what happened? The policies of Gov. John Bel Edwards have been attacking the business leaders of Louisiana by raising the sales tax rate by 20 percent5, driving up costs across the board. Since his inauguration there has been a seemingly endless stream of threats to raise taxes on the backs of individuals and job creators; including higher taxes on professional services, gas tax increases and even radical gross receipt taxes. These threats aren’t welcoming or encouraging for anyone looking to start, continue or expand operations in Louisiana.

So what has Gov. John Bel Edwards proposed to correct our crumbling infrastructure, dismal education system and a judicial system that punishes businesses?
When businesses are looking to operate in a new state, a key factor in their decision making is the state’s infrastructure that is required to conduct business. Trucking companies need safe, smooth roads. Shipping companies require reliable railways and port access. The state currently faces a $13 billion backlog on current road and bridge projects6 and the crumbling water system has been given a D+ rating.7

Our education system has been rated as the worst in the entire country.8 What has been Gov. John Bel Edwards’ plan? His administration rolled back education reforms that were raising the state’s profile and creating a prepared workforce. The reforms that were in place allowed Louisiana education officials to see increases in standardized test scores, ACT scores, graduation rates and advanced placement credits earned.9 He has signed bills that cut scholarship programs for children10 and removed funding for the TOPS program. He even backed removing letter grade rankings which provided transparency and accountability for parents.

Our education system has been rated as the worst in the entire country.

Business leaders have been opened up to attacks on the legal front with Gov. Edwards’ administration. He has opposed bills that would stop frivolous lawsuits from destroying local businesses.11 His government has even begun to attack our state’s largest employers, the oil and gas industry.12 He has urged governments to sue energy companies, which in the end will only enrich trial lawyers that bankrolled his campaign.13

While our state’s economy has been on a decline, we have seen others in our region begin to soar and prosper. States like South Carolina14, Georgia15, Alabama16, Texas17 and Mississippi18 have seen significant economic development from international companies, while Louisiana was named the worst state to live in.19  Louisiana is home to only four Fortune 1,000 companies, while our neighbor Texas has more than 100.20

Taxes, crumbling roads, removal of education reforms and trial lawyers running amok. It’s no wonder we’ve fallen so far in just over a year.

Footnotes:

1 http://www.nola.com/business/index.ssf/2016/03/louisiana_jobs_numbers_to_know.html

2 http://gnoinc.org/news/awards-rankings/louisiana-ranks-1-best-business-climate-in-the-usa/

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

4 http://www.nola.com/business/baton-rouge/index.ssf/2015/05/louisiana_ranks_7th_best_state_for_business_chief_executive_magazine.html

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

6 http://thehayride.com/2016/02/your-taxes-are-going-up-and-its-your-fault/

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

8 http://www.theadvocate.com/baton_rouge/news/education/article_267fa724-57f4-11e6-9a77-47e1011b4e6a.html

9 http://www.knoe.com/content/news/Reports-show-statewide-gain-in-student-achievement-in-Louisiana-401684525.html

10 https://www.usnews.com/opinion/articles/2016-05-02/louisianas-john-bel-edwards-is-back-pedaling-on-school-voucher-program

11 http://www.theadvocate.com/baton_rouge/news/politics/legislature/article_aed25bdc-f197-5e81-975b-ab43b3a46f31.html

12 http://www.nola.com/environment/index.ssf/2016/05/edwards_oil_execs_disagree_on.html

13 http://www.theadvocate.com/baton_rouge/news/environment/article_36a72414-6fd3-11e6-84fb-533941a35403.html

14 http://progress.postandcourier.com/?p=336

15 http://www.11alive.com/money/mercedes-benz-breaks-ground-on-93-million-headquarters-1/326198441

16 http://www.madeinalabama.com/2017/03/honda-alabama-expansion/

17 http://wardsauto.com/industry/toyota-s-lentz-about-3000-workers-expected-move-texas

18 http://www.bizjournals.com/charlotte/blog/outside_the_loop/2016/02/continental-tire-to-build-2-500-job-tire-plant-in.html

19 https://www.usnews.com/news/best-states

20 https://www.geolounge.com/fortune-1000-companies-list-2016/