SADOW: The “End Of Cities” And Louisiana’s Virus Response

Accelerated by the Wuhan coronavirus pandemic, the “end of cities” isn’t confined to Louisiana’s urban areas as an indictment of the state’s direction the last five years under Democrat Gov. John Bel Edwards.

Up to the production of 2020 population estimates – which in a couple of weeks the actual Apr. 1, 2020 census numbers will supersede – analysts ruminated about the hollowing out seen in a number of American cities, and about others that have see a surge in new residents over the year. Relatively heavy outflows came from New York City, San Francisco, Los Angeles, Chicago, and Washington, DC, while the likes of Austin, Phoenix, Nashville, Tampa, Jacksonville, Las Vegas, Charlotte, Dallas, Charleston, Denver, Tulsa, Louisville, Burlington, Knoxville, Syracuse, and Little Rock appear to have picked up significant numbers of new residents.

Notice something? Losing cities were in states (and DC) with Democrat control of government, while among winning cities only Denver, Syracuse, and Las Vegas were the same, with every other city (except Burlington) located in a state with complete Republican control (Vermont has a Democrat-led Legislature). More anecdotal evidence confirms flight from overtaxed, overregulated leftist states towards friendlier conservative ones.

In Texas, firms have cascaded in from California and other such places, to the point its GOP Gov. Greg Abbott almost can’t keep up with it. Recall that Texas has no personal income tax and a low one percent rate on corporate income taxes, while in both instances Louisiana has a graduated scale starting at relatively low incomes with rates spiraling to among the highest in the country. And while Texas has much higher personal property taxes, Louisiana’s keeping those rates low for residents foists much higher rates on business where any relief to those confiscatory levels has to run a political gauntlet.

Notice as well that Louisiana has picked up no largesse from those fleeing liberal states. This is reflected in population changes: while low-tax states – Arizona, Delaware, Florida, Idaho, Nevada, South Carolina, Texas, Utah, Washington which average about 15th in the Tax Foundation’s latest rankings of state business tax climates – saw over one percent population growth from last year, 16 states lost population, where those which lost as much or more in percentage terms as Louisiana’s 0.28 percent – Alaska, Hawai’i, Illinois, Mississippi, New York, and West Virginia – had an average rank of around 32nd.

Which has left Edwards in a position very much the opposite of Abbott: claiming hollow victories and trying to explain away visible defeats. When Shell said it would decamp 700 jobs from the state, he tried to blame this – unsuccessfully – on the pandemic rather than his policies that flash red not only to companies relocating, but to those already in Louisiana.

When Amazon recently announced that sometime in 2021 it would complete its first Louisiana fulfillment center, Edwards crowed about how this would create 500 jobs in a facility long sitting idle. Of course, the company already had 223 across the country (mostly fulfillment centers, but some supplemental and returns centers) with Texas having close to a dozen. Louisiana is really late to the party, and it’s not hard to understand that its indifferent climate towards private sector-driven economic development explains why.

And when Edwards talked up news that ExxonMobil could reinvest nearly a quarter-billion dollars in its existing Louisiana infrastructure, he didn’t deliberately dampen the impression that it represented some kind of expansion. Earlier this month, Exxon said it would consider this project that would create 600 temporary construction jobs, but it was in the context of keeping 1,300 permanent jobs in the state “pending final engineering, design and investment decisions” where a “decision to proceed could come from ExxonMobil in 2021” (emphases added).

Translation: if the company doesn’t get sufficient tax breaks from the parish and state, it can do like Shell and consolidate more within Texas with its more favorable investment climate. Already the Edwards Administration is hustling to disgorge tax dollars to entice it to hang around.

To put it another way, while Abbott fields multiple relocation inquiries a week, Edwards is bending over backwards to keep what Louisiana has. Texas under Abbott and his past couple of Republican predecessors have made the state ever more naturally attractive to suitors, while the regression Edwards has prompted (although the tax increases he shepherded into being built on another the year prior to his gaining office) requires applying more and more makeup in terms of specific tax breaks offered that still don’t compensate for the ugliness of punitive higher personal income and sales taxes imposed on the jobs created.

With the pandemic loosening corporate moorings and creating greater worker mobility than ever, Louisiana will continue to lose out so long as Edwards continues his tax-and-spend agenda. The news releases and population numbers provide the proof.



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