Several studies and reports rank Louisiana as the worst state in the country for business, and the worst run government with a high disapproval rating among its citizens. They also rank Louisiana as one of the most dangerous states in America whose cities are losing jobs every year.
One partial reason for this is evidenced by a new report released by 24/7 Wall St., a financial organization that reviews economic indicators, budget allocations and balance sheets, along with other factors to rank each state. According to data from fiscal year 2015-16, 24/7 Wall St determined that Louisiana is the worst run state government of all 50 states.
During this time period, it notes that Louisiana’s 6.1 percent unemployment rate was the third highest in the country; its poverty rate the second highest.
“No state is worse for business than Louisiana,” the report states. “Working-age Louisianans are less likely than the vast majority of state residents to have the qualifications many businesses look for in job applicants — just 23.2 percent of adults in the state have a bachelor’s degree, nearly the lowest percentage of all states.”
It also analyzed the best and worst climates for businesses, ranking Louisiana last as well. Using 47 measures within eight categories, it identiified key factors that businesses consider when deciding where to locate. They include economic conditions, business costs, state infrastructure, availability and skill level of the workforce, quality of life, regulations, technology and innovation, and cost of living. The geometric mean derived from this data created indexes for comparison and a state’s overall score.
One contributing factor is the presence of science, technology, engineering, and mathematics-related occupations, which usually help create business-friendly environments and sustainable economic growth. Just 3 percent of jobs in Louisiana come from this sector.
Among other categories, Louisiana residents’ average annual salary is the 22nd lowest at $46,000. Louisiana has the seventh lowest change in working-age population between 2010 and 2020 (-3.2 percent) and the fourth lowest percentage of adults who earned undergraduate bachelor degrees (23 percent).
The Chicago-based think tank Truth in Accounting’s (TIA) reviewed Louisiana’s financial health and its most populous city, New Orleans, giving both D grades.
Based on data derived from the state’s 2016 audited Comprehensive Annual Financial Report and retirement plans’ actuarial reports, TIA concludes, “state government officials continue to obscure large amounts of retirement debt on their balance sheets, despite new rules to increase financial transparency.”
TIA calculated that Louisiana has $13.7 billion in assets and owes $37.3 billion in bills. If Louisiana taxpayers were to cover its $23.7 billion shortfall, they would each owe $18,300.
Among the 75 most populous cities in America, TIA ranked New Orleans No. 68, with 75 being the worst. New Orleans is in the eighth worst financial shape in the U.S., according to TIA. Its $1.2 billion in assets cannot cover its $3.1 billion worth of debt.
The TIA report says “repeated decisions by city officials have left the city with a debt burden of $1.9 billion, according to TIA’s analysis of its 2016 financial filings. That burden equates to $17,800 for every New Orleans taxpayer.”
It maintains that New Orleans’ financial problems “are largely driven by long-term debt and runaway entitlement obligations in the form of pension benefits. The city has $1 billion in unfunded pension promises and $362.8 million in unfunded retiree healthcare benefits. While New Orleans has promised these benefits, little money has been set aside to fund them.”
While government officials did increase financial transparency in 2015 by including the city’s pension debt on its balance sheet, TIA notes that they failed to report more than half of New Orleans’ unfunded retiree healthcare debt, amounting to a hidden debt of $199.4 million.
These reports provide insight into why Louisianans have expressed their lack of trust in state government leaders. A survey just released by Louisiana State University’s Public Policy Research Lab reveals that most citizens have little confidence in Gov. John Bel Edwards’ ability to work with state legislators and do not believe government officials can provide any solutions.
The project, part of the Manship School’s Reilly Center for Media & Public Affairs, was conducted while the Legislature convened its fifth special session to address the state’s expected $600 plus-million deficit. The findings are the first of six reports released by the Louisiana Survey, which was created to determine how Louisianans view their state government. The Louisiana Survey has been tracking public opinion on political issues affecting the state since 2003.
Michael Henderson, director of the Public Policy Research Lab, said of the results, “What we see this year with the survey is that people overall feel more negatively about the state of Louisiana and are frustrated with the lack of compromise and problem-solving in the Capitol.”
Fifty percent of those surveyed feel the state is headed in the wrong direction, an increase of 40 percent from the previous year. Seventy-three percent believe the state is more politically divided than in the past; 79 percent believe both Republicans and Democrats will oppose each other to such a great extent that they won’t solve the state’s problems. Only 18 percent believe the two parties will be able to work together. Sixty-one percent feel “not very” or “not at all” confident in the government’s ability to address the state’s most important problems; 78 percent trust state government only “some of the time” or “never.”
This article was first published on Watchdog.org.