Louisiana has once again been ranked first when it comes to being impacted by federal regulations, according to the latest annual report from the Mercatus Center at George Mason University. Louisiana has been ranked first in the report since 2008.
Titled The Impact of Federal Regulation on The 50 States, the report examines the relative impact of federal regulations on states and assigns each a “federal regulation and state enterprise”—or FRASE—index score.
The index scores are calculated by weighing the number of restrictions targeting each industry according to its importance to each state, relative to the industry’s importance to the nation as a whole. A score of one means means federal regulations have a higher impact on the state than on the nation, while a score above one indicates a higher impact on the state level than nationally.
Louisiana’s score is 1.74, which indicates the impact of federal regulations on industries here are 74% higher than the impact on the nation overall. The state’s top ranking in the report is reflective of the large chemical manufacturing, and oil and gas industries—each of which is heavily regulated—in the state.
“As Louisiana’s second largest industry, (chemical products manufacturing) represents 8.1% of the state’s private sector, more than three times the national average of 2.2%,” the report reads, noting the industry is subject to 10 times as many federal regulations—66,789 in total—as the average industry.
The state’s other top industries include real estate, retail trade, oil and gas extraction, and construction, the report says. There are 15,000 federal regulations on the oil and gas extraction industry; 10,280 on the construction industry; 6,014 on real estate; and 14,295 on the retail trade, the report says.
“Although the ratio of the impact of the federal regulation on the state on its impact on the nation fluctuates some from year to year, more dramatic growth has occurred in the total number of regulatory restrictions affecting Louisiana since 1997,” the report reads.
Following Louisiana in the rankings are Alaska, Wyoming, Indiana and Kentucky. New Hampshire is ranked last in the report, with an index score of 0.68, preceded by Washington, D.C., Rhode Island, Massachusetts and Vermont.
The study notes the U.S. has become more heavily reliant on regulations, which carry the full force of the law, as a means to prevent future crises such as the Great Recession of 2008. The report explains that economists can appreciate the importance of regulations but they have been unable to quantify the impacts of the nation’s abundant regulations.
—Alexandria Burris
