Piyush Jindal loves to regurgitate reports that tell of Louisiana’s wonderful business climate (with all but non-existent corporate taxes, cheap labor and a glut of laid-off state employees looking for work, why would the climate not be pro-business?) but here’s a report we aren’t likely to hear him say much about or post on the state web page as is his custom when the reports are favorable.
Louisiana has the 10th worst-run state government in the nation, according to a study just released by 24/7 Wall Street, an independent research company.
While acknowledging that measuring the successful management of a state is difficult, 24/7, which each year conducts an extensive survey of all 50 states, considered data from a number of sources. These included Standard & Poor’s, the Bureau of Labor and Statistics, the U.S. Census Bureau, the Tax Foundation, Realty Trac, the FBI, and the National Conference of State Legislators.
Once all the data were extrapolated, each state was ranked on the basis of its performance in all categories, the study’s methodology report said.
“A state with abundant natural resources should have an easier time balancing its budget than one starved for resources,” the study said. “Despite this, it is the responsibility of each state to deal with the resources at its disposal. Each government must anticipate economic shifts and diversify its industries and attract new business.”
Those are particularly damning observations insofar as Louisiana’s ongoing fiscal crisis is concerned. Massive budget cuts have gutted the operations of many state agencies. Higher education, for example, once received two-thirds of its budget from state appropriations and the rest from tuition. That is completely reversed today as tuition increases of some 40 percent over the past several years coupled with budgetary cuts now has tuition providing two-thirds of all revenue for higher ed.
Another general criticism of poorly-run states that well may have been addressed specifically to Louisiana and the Piyush administration said, “A state should be able to raise enough revenue to ensure the safety of its citizens and minimize hardship without spending more than it can prudently afford. Some states have historically done this much better than others,” it said.
Piyush has steadfastly refused to consider any efforts to raise additional revenue, including tax increases. Instead, he has consistently pushed for more liberal tax incentives for businesses, a policy that has cost the state up to $5 billion per year, according to official estimates.
The 24/7 report cites North Dakota as the best-run state in the nation, the first time it has received that distinction. As of August of this year, North Dakota was the second-largest oil producer in the nation because of the use of hydraulic fracturing in the state Bakken shale formation.
The oil and gas boom brought jobs to the state, whose 3.5 percent unemployment rate was the country’s lowest in 2011.
North Dakota and Montana (the 18th best-run) were the only states that have not reported budget shortfalls since fiscal 2009.
Louisiana, on the other hand, earned its 10th worst-managed state on the basis of having:
• The 26th largest budget deficit (14.3 percent);
• The seventh lowest median household income ($41,734);
• The third highest percentage of its citizens living below the poverty line (20.4 percent);
• The 10th smallest proportion of its budget dedicated to social welfare due in large part to a lack of tax revenue (and this was before the latest round of budget cuts, including Medicaid);
• One of the highest violent crime rates in the nation (New Orleans had the highest murder rate in 2011);
• The 20th highest debt per capita.
Louisiana’s ranking as the 10th worst-run state puts it just ahead of Mississippi, the 11th worst, the report indicates. Mississippi had the lowest median household income ($36,919) in the nation, the country’s highest percentage of people living below the poverty line (22.6 percent), and the country’s fourth highest unemployment rate (10.7 percent).
California, with the second highest unemployment rate (11.7 percent) ranked as the worst-run state in the nation despite having the 10th highest median household income ($52,287.
Following are the 10 best-run states and some of the factors that got them their high rankings, according to 24/7:
1. North Dakota (lowest unemployment rate);
2. Wyoming (sixth lowest percentage of families living below poverty line);
3. Nebraska (second lowest in both unemployment and per capita debt);
4. Utah (11th lowest unemployment rate, tied for 17th lowest percentage living below poverty line);
5. Iowa (7th lowest per capita debt, 6th lowest unemployment rate);
6. Alaska (second highest median household income, 4th lowest percentage living below poverty line);
7. South Dakota (3rd lowest unemployment rate);
8. Vermont (5th lowest unemployment rate, 7th lowest percentage living below poverty line);
9. Virginia (7th highest in median household income, 7th lowest percentage living in poverty);
10. Minnesota (13th lowest per capita debt, 11th highest median household income, 10th lowest percentage living in poverty);
….and here are the 10 worst-run states, along with some of the reasons for their less than desirable standings:
41. Louisiana (20th highest per capita debt, 7th lowest median household income) 3rd highest percentage living in poverty);
42. Florida (tied for 6th highest unemployment rate);
43. South Carolina (8th highest unemployment rate, 9th lowest median household income, 9th highest percentage living in poverty);
44. New Mexico (8th lowest median household income, 2nd highest percentage living in poverty);
45. Nevada (largest budget deficit in nation, highest unemployment rate in nation);
46. New Jersey (5th highest per capita debt, 4th highest budget deficit, 13th highest unemployment rate);
47. Arizona (3rd largest budget deficit, 13th highest unemployment rate, 8th highest percentage in poverty);
48. Illinois (11th highest per capita debt, 2nd largest budget deficit, 10th highest unemployment rate);
49. Rhode Island (3rd highest debt per capita, 3rd highest unemployment rate);
50. California (2nd highest unemployment rate, 18th highest percentage living in poverty).