Louisiana: At the bottom of yet another economic list

Recently, the American Legislative Exchange Council (ALEC) released its 16^th edition of the annual report titled “Rich States, Poor States: ALEC-Laffer State Economic Competitiveness Index.” The report ranks the economic competitiveness of each state, and once again, Louisiana is found to be last.

Louisiana ranks dead last in economic performance, which measures the state’s performance based on three variables. Employment growth and net migration have both been negative over the past decade, whereas total GDP growth has been astonishingly sluggish.

On the other hand, Louisiana ranks 26^th in ALEC’s measure for economic outlook, which uses fifteen state policy variables to determine each state’s comparative outlook. This is a forward-looking forecast based on variables that include tax rates and burdens, government debt and the size of government, and labor standards and costs.

Louisiana is solidly in the middle of the pack because there are some factors where rankings are good, such as being a right-to-work state and having no estate taxes, a relatively strong expenditure limits, and a low property tax burden. However, all of these excellent ratings are offset by terrible ratings on the sales tax burden, the size of the state’s debt, the number of public employees as a share of total population and having a terrible rank on the judicial hellhole list.

Despite the seemingly positive outlook rank, Louisiana still lags behind all of its southern counterparts:

What are these states doing differently? They are lowering and flattening income tax rates or have no income tax, and they have lower government-related costs of labor, better budgeting, and smaller government.

ALEC’s report puts Utah at number one in the economic outlook rank. Utah has an overall lower tax burden, smaller government, and lower costs of labor. Its economic performance ranks second best with a rapidly growing GDP, growing population, and growing employment.

Pelican recently highlighted one of the reasons Utah recovered from the pandemic shutdowns faster than any other state: social safety net reform. Utah’s “one door” policy integrates safety net and workforce systems to ensure seamless service for the state’s poor to rise out of poverty and into the dignity of work. This concept plays an integral role in the economic success of the state.

Louisiana, too, can succeed like Utah. Just look at our state’s assets: five of the top fifteen ports in the country, the most active natural gas sector, numerous oil refineries, affordable land, unparalleled food and culture, and not to mention the mouth of the mighty Mississippi River. That’s enough to position any place to be an economic powerhouse.

There is no reason for Louisiana not to succeed. It’s why Pelican has released Louisiana’s Comeback Agenda with recommendations to foster dignity and a prosperous life, allowing citizens to flourish.