Ranking in the top 10 states for business according to CEOs just last year, Louisiana tumbled to No. 37 in Chief Executive magazine’s 2016 Best & Worst States for Business.
The magazine attributes the state’s dramatic fall to its multimillion-dollar budget disaster.
“Last January, John Bel Edwards, Louisiana’s new Democratic governor, said he learned of various ‘devastating facts’ and decried sales of state assets to plug a $2 billion budget gap,” the magazine reports.
Louisiana was ranked No. 7 overall in the 2015 rankings. Along with its No. 37 overall ranking this year, Louisiana is ranked No. 31 for taxation and regulation, No. 46 in workforce quality and No. 46 in living environment.
The magazine quotes an anonymous CEO as saying: “The Louisiana litigation environment is awful; tort and legacy liability litigation appears to be a major industry.”
Chief Executive asked 513 CEOs to rank states according to the living environment, workforce quality and tax and regulatory regime. Texas and Florida topped the list, as they have every year for the past 12 years the magazine has conducted the survey. Executives view Texas favorably for its economic reforms even in the face of being hard hit by the shale energy bust, the magazine says. Florida added one million private sector jobs during the last five years, cutting taxes 50 times and getting rid of 4,200 regulations.
“Leaders favor states with fewer regulatory encumbrances and report that most remedies dangled by politicians only make things worse,” the magazine says.
The survey suggests that workforce quality also is becoming a top priority for many CEOs and that pro-growth policies reforms with minimal red tape can swing the site selection needle in a state’s favor.
For the first time this year, the magazine sought to find out if CEOs in each state view their business climates any better or worse than out-of-state executives. For the most part, with the exception of Mississippi, Hawaii and Alabama, their opinions did not differ widely from their own overall perception. CEOs in those states views them more favorably than outside CEOs.
Aside from Louisiana, New Hampshire, Colorado, Iowa and Rhode Island saw their rankings fall the most in 2016, the magazine notes. None, however, tumbled as far as Louisiana. The magazine identifies one of the state’s challenges as the Louisiana Treasury paying more out in tax rebates to corporations than it collects.
But there are some bright spots, the magazine says. A 1,200-room hotel and entertainment district the Ernest N. Morial Convention Center planned in New Orleans is a plus for the state and could help drive new business to the city. Another bright spot is Edwards’ executive order to protect state employees and contractors against discrimination based on sexual orientation and gender identity.
—Alexandria Burris
