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State-by-State Economic Report Shows a Lackluster Louisiana

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Focusing on factors of limited government, ALEC study reveals that Louisiana has some areas to improve upon 

Louisiana’s economic prospects are mediocre, according to a new report released by the American Legislative Exchange Council, which ranked the 50 states according to their economic outlook in 2013.

The sixth-edition of the study, Rich States, Poor States, reveals that, nationally, those states with limited government regulation, low tax rates, and right-to-work laws can look forward to brighter economic futures.

While many of its Southern neighbors such as Mississippi, Florida and Georgia earned top-ten spots, Louisiana fell to the middle of the pack with a ranking of 28 for its economic prospects in 2013. Utah earned the top spot in the study. 

“It is clear that limited regulation, low taxes, low debt, and balanced budgets create the best environment for business, investment and jobs,” said Utah Senate President Wayne Niederhauser.

The study’s ranking system arranges the states based on each state’s current standing amongst 15 state policy variables. Of those variables, Louisiana received low marks for its sales tax burden and its state liability system survey, a measurement of the state legal system.

This is the first time in five years that Louisiana has not been in the top half of the rankings. In 2012, the state received a ranking of 19. 

The study found that over a ten-year period those states without a personal income tax, such as Texas and Florida, outperformed those states that do have the tax. Texas and Florida earned rankings of 12 and 9, respectively.

At the opening of the 2013 legislative session, Gov. Bobby Jindal scrapped his original plan to eliminate the income tax after the plan was met with displeasure from inside and outside the legislature. The governor sought to replace the state income tax with increased state sales tax.

Overall, the studies’ findings showed that Southern states overpowered those in the North. Vermont came in last place, preceded by New York.

“Much of the Northeast and the Midwest are falling further and further behind, while the South, along with much of the Plains and Mountain states, are booming,” according to report authors Dr. Arthur Laffer, Stephen Moore and Jonathan Williams.

The authors also conclude that currently the “economic gazelles” in the United States lie in the South. Based on their Louisiana ranking, it is doubtful that they would label Louisiana lawmakers as economic groundbreakers.

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