State Facts
Analysis
Louisiana remains one of the least free states in the South, but it improved dramatically in the years 2007 to 2010—almost wholly due to changes in fiscal policies.
Between FY 2008 and FY 2010, fiscal policy improved overall with a significant decline in tax burden, from 9.6 percent to 8.7 percent of personal income, and an increase in fiscal decentralization, even as government consumption plus subsidies increased from 10.7 percent to 11.6 percent of income. Government employment is quite high, at 15.5 percent of the private workforce.
Local zoning is relaxed, there are some regulatory takings protections, and eminent domain has been thoroughly reformed. Louisiana is a right-to-work state with no minimum wage; unfortunately, it is one of a few states with a ban on insurance discrimination against smokers. Health insurance mandates add 46.5 percent to the cost of private plans, down from 48.1 percent two years prior, but still substantially higher than the national average. Occupational licensing remains notoriously strict despite tiny improvements. Health professionals’ scope of practice is also almost totally unreformed. The liability system is perhaps the second-worst in the country; only sampling error prevents a definitive judgment here.
Gun control laws and alcohol laws are liberal (except for a “happy hour” ban, keg registration, and mandatory server training), but the marijuana sentencing regime is strict: the maximum sentence for a single offense is 80 years, and even low-level cultivation is a felony. While the state allows many forms of gambling, it has enacted a prohibition on Internet gambling, and unauthorized gaming is a felony. (Special-interest politics clearly drive this combination of policies.) There are many petty regulations, such as a primary seat belt law, motorcycle and bicycle helmet laws, sobriety checkpoints, a total raw milk ban, and a law authorizing police to take DNA from all felony arrestees. Private schools are heavily regulated, requiring teacher licensing and mandatory registration. However, the homeschooling laws are much better, and there is a school tuition and expense tax deduction. Louisiana has one of the country’s most draconian victimless crimes regimes, with crime-adjusted incarceration rates two standard deviations above the national average and drug arrests as a percentage of drug users one standard deviation above the national average.
Policy Recommendations
- Cut spending in areas well above national norms: employee retirement, miscellaneous commercial activities, water transportation (where Louisiana spends three times as much as Texas, another state with large ports), public parks, natural resources, housing and community development, hospitals, general administration, and prisons (sentencing reform will help with this one). Use proceeds to retire debt and reduce the sales tax.
- End partisan judicial elections and enact tort reforms in order to improve the court system. A merely average court system would have raised Louisiana a whopping 28 places on regulatory policy.
- Eliminate mandatory registration of private schools and teacher licensing.
