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Study Finds Louisiana business Climate Doing Well

July 14, 2014

By Rudy Takala

A report released last week assessing state business climates placed Louisiana near the top nationally, giving the state a grade of “A.”

The study, conducted by the Kauffman Foundation and Thumbtack and reported on in The Economist, examined state business climates by looking at a combination of tax rates, regulatory environment and licensure requirements for low-income occupations. Louisiana was just one of four states to receive an A grade on the report. Two states, Virginia & Texas, received the top grade of A+.

The booming economies in states that are relatively free – like Louisiana – stand in stark contrast to the dying economies seen in states with burdensome economic regulatory and tax environments.  Illinois, which received an “F” on the report, saw an unemployment rate of 7.5 percent in May. California, which also received an F, had an unemployment rate of 7.6 percent. Virginia tied with Texas at an unemployment rate of 5.1 percent. Louisiana fared even better, coming in at 4.9 percent. Neighboring Mississippi, with its C+ on the report, did the worst of all at 7.7 percent.

However, Louisiana did very poorly in the area of licensing. The study observed that Louisiana imposes the most burdensome licensing requirements of any state in the nation. Out of 102 low-to-mid income professions, only three states – Arizona, California and Louisiana – imposed licensing requirements on more than 60 percent. Louisiana came in as the #1 most burdensome, imposing requirements on 70 percent of the listed professions.

Though there is work to be done in the area of getting the hands of government regulators out of certain professions, Louisianans are continuing to fare better than the overregulated and overtaxed residents of states like Illinois and California. The study serves as a reminder to other states that they may look to Louisiana as a model of how they can work to improve their own regulatory and tax environments.

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