…it isn’t like the results from this year’s American Legislative Exchange Council survey are particularly encouraging for the state.
Louisiana ranks 27th among the 50 states in Economic Outlook, which is an index made up of a lot of factors, mostly measuring tax burdens, debt service, the density of public employees in the population, the legal climate and a number of other things. Meanwhile Louisiana ranks 31st in Economic Performance – which is an index measuring the last decade of economic growth, and that 10-year window contains some pretty good post-Katrina years on the front end which skews the numbers positively in a way which belies where Louisiana really is.
As an example of how a 10-year window can be overly generous to Louisiana, last week the Small Business Administration put out a report showing economic performance and Louisiana performed miserably. Specifically, In the third quarter of 2017, Louisiana grew at an annual rate of 1.1%, while the overall US growth rate was 3.4%. In 2016, the state’s growth rate was…0.2 percent. It was 0.6 percent in 2015.
We’ve said this before, but when you grow at 0.5 percent or 1.0 percent and the national economy is growing at 1.5 percent, it’s bad but it’s not a catastrophe – the spread between you and your neighbors isn’t so pronounced that your people start leaving in pursuit of better lives and opportunities elsewhere. But when the national economy starts growing at 3 or 4 percent and you’re still at 0.5 or 1.0, now you have a problem.
Particularly given that if the national number is 3.4, as in the third quarter 2017 figures released last week by SBA, you can bet the Southern states Louisiana directly competes with are going to be growing at least that fast.
And that’s an awfully good bet. How did our competitors grow in the third quarter of 2017?
Texas grew at 5.0 percent.
Florida grew at 3.0 percent, which was weak for them and they’re still almost tripling Louisiana’s number.
Alabama grew at 2.7 percent.
Arkansas grew at 2.0 percent.
Mississippi grew at 2.7 percent.
Georgia grew at 3.2 percent.
Tennessee grew at 3.0 percent.
South Carolina grew at 2.9 percent.
Kentucky grew at 2.2 percent.
North Carolina grew at 3.0 percent.
So even the laggards in Arkansas and Kentucky are essentially doubling Louisiana’s growth. Those are terrible numbers.
Why is Texas growing at practically five times Louisiana’s pace? Let’s grab some results from the Rich States, Poor States study…
Texas beats Louisiana in nearly every metric indicating whether someone would want to do business in one of the two. That’s why they grow at five percent and Louisiana grows at 1.1 percent.
And this problem isn’t going to improve in the immediate future. Why? Because at the Capitol you have a Legislature and a governor scrambling to come up with ways to tax the people more in order to feed a public sector which does an objectively poor job of providing quality services to the people, and there are only a blessed few, mostly in the House, who are looking at these numbers and recognizing Louisiana can’t compete with our neighbors next door with that as our focus.
But the 2019 elections are looming, and the time is going to come when the voters are going to be tasked with looking at numbers like these and deciding whether they’re acceptable. Right now you can complain about the failure of Louisiana’s politicians, but if you don’t vote for major, fundamental change in 2019 the person whose failures deserve complaints is you.