Louisiana ranks below average in economic ‘freedom’ study, but trending upward

By William Patrick, The Center Square

Louisiana is steadily climbing toward becoming a more economically free state, according to a newly published Cato Institute report.

At 32nd in the country, however, Louisiana has a long way to go, the Washington-based think tank suggested in its report, Freedom in the 50 States.

“ ‘Freedom’ is a moral concept,” Cato argued, adding, “individuals should not be forcibly prevented from ordering their lives, liberties, and property as they see fit, as long as they do not infringe on the rights of others.”

The 2021 study analyzed dozens of state and local policies within the “fiscal, regulatory and personal realms” and compared them to the ideal of “maximum equal freedom,” or equality before the law. The result is a numerical index and state ranking list.

“Louisiana used to be one of the least economically free states in the South, but it has improved significantly on fiscal policy since 2008,” the 313-page report read. “The state is now in the middle of the pack on both economic freedom and personal freedom.”

Authors William Ruger and Jason Sorens listed positive highlights before criticizing key public policy areas.

Louisiana, a right-to-work state, was rated favorably for labor-market freedom. The state-level tax burden of 5% of income and local tax burden of 4.5% of income hovered around the national average. Government debt continued to fall since the 2008 financial crisis, as has the rate of government employment versus private sector jobs, they said.

“Needless to say, Louisiana is one of the most cronyist states,” the study authors wrote.

Chief among the problems cited was the state justice system.

“Louisiana’s court system has long been terrible no matter how you measure it,” the report said. “It was dragged down for this edition by being the second-worst state on criminal justice policy, but this represents an improvement over 2016, when it was the worst. Crime-adjusted incarceration rates are extremely high despite getting better since 2016.”

The issue is not lost on some policymakers and the business community. A state justice commission is evaluating how to reform the practice of levying fines and fees against individuals within the criminal justice arena. Such costs fund local courts and often indebt people to the system.

The Louisiana Association of Business and Industry, the state’s largest business group, also is spearheading a judicial reform movement. The association recently released a four-part series delving into key aspects of the complex issue. The group contends Louisiana’s judiciary lacks accountability standards that apply to the executive and legislative branches of state government.

The Cato report also cited Louisiana’s occupational licensing laws, which it called “notoriously bad.”

“As of this writing, it is still the only state to license florists – out of a concern for public health and safety, no doubt,” the report said. “Nurses and dental hygienists have very little freedom of practice, but physician assistants gained additional prescription authority in 2018.”

A review of state-issued licensures shows dozens of occupational categories, and many are low-risk professions, such as barbers, auctioneers and cosmetologists. 

The most economically free states according to Ruger and Sorens are Florida, Tennessee, New Hampshire, South Dakota, Idaho, Georgia, Indiana, Michigan, Nevada and Texas.

The least economically free states are Hawaii, Vermont, Delaware, Minnesota, Arkansas, California, Mississippi, West Virginia, New York and Maine.

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