Louisiana Narrowly Avoids Government Shutdown

Date: July 17, 2017

Louisiana’s regular legislative session ended with mixed results. While small businesses breathed a sigh of relief after the gas tax hike and the $8.50 minimum wage and equal pay labor mandates failed to pass, lawmakers’ failure to reach an agreement on the state’s crushing budget and tax issues forced another expensive special session.

Just ahead of the start to the new fiscal year, legislators passed a budget deal and Gov. John Bel Edwards signed into law with four line-item vetoes, reported U.S. News and World Report. It includes full funding of the TOPS college scholarship program for 2017-2018, increased funding for higher education, a pay raise for 38,000 state employees, spending reductions for mental health services and charity hospitals, and a holdback of $60 million in case revenue falls short of projections.

But since fiscal reform was largely ignored this session, despite months of talk promising it would be the focus of session, Louisiana still ranks first for the highest combined state and average local sales tax rate in the country. The increase passed in 2016 to help bridge a more than $1 billion budget hole will expire on July 1, 2018, and lawmakers still don’t seem to have a plan for how to address this pending problem.

Meanwhile, the Pelican State is hovering around the middle of the pack when it comes to business climate for startups. According to a new report from WalletHub, Louisiana is the 21st best state to start a business. It scored 46.55 (out of 100) overall and ranked 30th for business environment, 32nd for access to resources, and 17th for business costs. Neighboring Arkansas ranked 41st, Mississippi 28th, and Texas 2nd.

The WalletHub analysis was based on an evaluation of 20 metrics, including factors like average growth in number of small businesses, average growth of business revenues, five-year business survival rate, taxes, labor costs, availability of human capital, and financing accessibility.

 

Related Content: Small Business News | Economy | Louisiana

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