Data show how bad policy makes people flee LA

Another year, another indicator of how Louisiana keeps bad company among flailing states – but also coming with clues on how to reverse that.

The Census Bureau released its annual end-of-year report on population changes in the states. In percentage terms, Louisiana fared third worst at barely under 0.8 percent population loss, continuing a trend throughout the governorship of Democrat John Bel Edwards as being one of the highest ranked losers annually in out-migration to other states.

Joining the state in the top ten losers were New York and Illinois ahead, with West Virginia, Hawai’i, Oregon, Mississippi, Pennsylvania, Rhode Island and Oregon behind. By contrast, in order the top ten gaining states were Florida, Idaho, South Carolina, Texas, South Dakota, Montana, Delaware, Arizona, North Carolina, and Utah.

These clusters for most of their members tend to have certain aspects in common, beginning with partisan control of statehouses. Of the losers, six are controlled completely by Democrats, Louisiana and Pennsylvania have Democrats as governors but Republicans controlling their legislatures, and only Mississippi and West Virginia are completely controlled by Republicans. Conversely, of the winners eight had complete Republican control (although Arizona flipped its governor’s party to start this year), North Carolina split, and only Delaware had complete Democrat control. In all, in the top ten Republicans had on average 1.7 branches of government, and in the bottom ten just 0.6.

Stark differences also appear in tax burdens. Using 2019 data, the average state-local tax burden as a share of state income in the bottom ten was 11.09 percent while for the top ten was only 9.26 percent. Louisiana actually was the lowest scorer of the bottom ten at 9.2 percent.

On these two indicators, Louisiana seems more of a candidate for the top ten than bottom ten than the bottom ten. However, another indicator pulls the state back: its score on the personal and economic freedom index computed by the Mercatus Center. This measures, on a scale of -1 to 1 with higher scores representing more, freedom in the areas of fiscal policy and regulatory policy, and personal freedom and economic freedom.

Using 2019 data, the overall average score for the bottom ten was -0.20672, while for the top ten was 0.22875. Louisiana mustered a 0.0065899, good for 32^nd place. Even so, it looks less like the bottom ten than any other member.

A final piece to the puzzle explains why Louisiana does fit among the bottom-dwelling states. Change in its per capita personal income from the end of 2022 through the third quarter of 2023 at a microscopic 0.08 percent increase ranked it second worst over the period, just beating out Hawai’i. In all, the top ten saw an average 4.4 percent increase while the bottom ten eked out just an average gain of 1.1 percent.

In short, people flee Louisiana because a fair-to-middling tax burden and below average amount of personal and economic freedom don’t provide enough impetus to reverse its stagnant economic opportunities. This in large part can be laid directly at the feet of Edwards, who during his terms has cajoled the Legislature into net tax increases and resisted any attempt for reforms that aren’t at least revenue neutral while boosting spending on programs that provide greater incentives towards less productivity such as Medicaid expansion. His refusal to support broader regulatory reforms and right-sizing of state government that reduce the footprint of the state, including reduced subsidization of local governments, also has contributed to the quagmire. Meanwhile, many states including most in the top ten have acted exactly the opposite over the past several years.

It will take a more enlightened governor and committed Legislature to start reversing the people drain, which carries off disproportionately more productive residents to create a vicious cycle of underperformance. Fortunately, elections this fall provide that chance.