From the Pelican Institute for Public PolicyLOUISIANA’S ECONOMIC GROWTH IS ONE OF THE LOWEST IN THE NATION
In the second quarter Louisiana’s economy grew by 4 percent. At first glance this appears like strong growth, but this ranked 45th in the nation for the second quarter. This comes after Louisiana’s economy grew by only .7 percent ranking 46th in the nation in the first quarter of the year.
The slow growth of Louisiana’s economy can be linked to a number of factors. Louisiana’s economy remains heavily dependent on travel and leisure spending. With fewer people willing to travel due to the COVID-19 and the Delta variant, combined with cancelled events, Louisiana’s economy was bound to struggle more than most.
That said, Louisiana’s policies can be blamed as well. For example, Louisiana’s tax code remains complicated and outdated which forces jobs to leave our state for our neighbors. Also, the overburdensome nature of occupational licensing laws in Louisiana hinders economic mobility and stunts people’s ability to find work.
Economic reports continue to show the status quo is leaving Louisiana behind the rest of the nation. Now is the time for reform to increase jobs and opportunities for Louisiana families.
Why are successful and innovative companies moving south but not to Louisiana? The states outdated and expensive tax structure plays a major factor, but so does Louisiana’s desire to protect the status quo from innovation.
Look no further than how Louisiana is treating Tesla, one of the most innovative and valuable companies in the world.
Rather than selling their vehicles through a traditional dealership model, Tesla instead sells their vehicles directly to consumers. This practice caused friction with car dealers who wanted to force Tesla to sell their products through dealerships rather than through their innovative business model. Twenty seven states allow some kind of direct sales from Tesla to consumers. But Louisiana’s government decided to side with the current status quo instead of allowing one of the most valuable companies in the world to come to Louisiana and bring with it jobs and innovation. In 2017, the state further clarified that Tesla is unable to sell their products to the people of Louisiana.
Business groups such as the Louisiana Association of Business and Industry are encouraging passage of Amendments 1 and 2, which would centralize sales and use taxes and decrease the individual income tax rate for top earners.
“Louisiana’s business tax climate ranks among the worst in the nation,” LABI President and CEO Stephen Waguespack said. “A pair of tax reform measures on the November 13th ballot could change that, enacting constitutional amendments to finally simplify our system, meaning lower tax rates and more jobs in Louisiana.”
The Louisiana Budget Project, a Baton Rouge-based nonprofit, opposes the tax reduction amendment, saying passage could harm the state budget and lead to "less money for education, health care and transportation."
The election’s two other proposed amendments deal with levee districts and state budget funding.
The fall election was scheduled for Oct. 9, but Gov. John Bel Edwards postponed Election Day to Nov. 13 because of Hurricane Ida. Most of Louisiana will see only the four constitutional amendments on their ballot, though some parishes and cities also will conduct local elections.
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