Louisiana moves up in Forbes’ ‘Best States’ ranking

Louisiana is an improved place to do business compared to other states in the country, placing 44th in Forbes magazine’s annual ranking of Best States for Business in 2009 in September.

Louisiana ranked last in 2006, the first year Forbes performed the study, and 49th in 2007 and 2008. The survey considers costs for business, labor supply, regulatory environment, current economic climate, growth prospects for business, and quality of life.

The state jumped 16 places from 2008 in the economic climate category, its biggest leap; nine spots in growth prospects, and seven places in regulatory environment. Economic climate includes job and income growth as well as unemployment numbers and the presence of large companies.

The only drop in the Forbes rankings for Louisiana was in quality of life, where the state slipped one slot to last in the country. Quality of life measures schools performance, crime levels, cost of living, poverty rates and health quality. The state’s labor ranking remained last.

Stephen Moret, secretary of Louisiana Economic Development, the state’s cabinet level economic development agency, said the growth prospects category is an assessment of the state’s economic outlook. The outlook was aided by an increase in the state’s bond rating, he said.

The move up in the regulatory environment category resulted from ethics reform, tax cuts, and stronger incentive programs, Moret said.

More generally, the state’s economy has benefited from film production tax credits and a more aggressive stance taken by Louisiana Economic Development, he said. Stricter disclosure requirements have been a major contributor to improving the state’s overall climate, according to Moret.

He also said LED’s State Economic Competitiveness Group has been instrumental in coming up with new recommendations to improve the tax climate and for other policies to better the economy.

Two state programs have benefited the economy as well, Moret said: the Louisiana Workforce Commission’s Rapid Response program and LED’s FastStart.

Rapid Response assists workers who have been laid off to find new employment. FastStart focuses on helping develop businesses in the state that are starting out. Its services are free.

In another recent survey, Portfolio.com ranked Louisiana second among states on how they have fared economically during the recent national recession, according to an LED release.

“Portfolio.com’s analysis underscores what we have known for a long time – Louisiana’s economy consistently has outperformed the South and the U.S. since the beginning of the national recession,” Louisiana Gov. Bobby Jindal stated in the release.

“While we are pleased with this ranking, we will continue to aggressively pursue economic development efforts so that we can remain ahead of the South and the U.S., but more importantly so that we can create more opportunity for our people,” he stated.

Locally, despite a recent loss in jobs, strong employment numbers in Terrebonne and Lafourche parishes contributed to the state’s improved ranking.

“If you look at our basic statistics, we represent a significant part of Louisiana’s growth,” said Terrebonne Economic Development Authority CEO Mike Ferdinand. “Terrebonne makes up around 6 percent of the state’s population but around 10 percent of its growth.”

Businesses in Terrebonne comprise 6.3 percent of businesses in the state, Ferdinand said.

Yet no companies have taken advantage of the FastStart program in the parish, he said.

“But if a company fits, they would utilize it,” he said. “It would make (the business) more competitive.”

The quality of education available in an area is important to attract business, Ferdinand said.

Forbes magazine cited it as one of the main factors contributing to economic growth.

“The more education, the more skills they get for the workforce,” Ferdinand said. “The stronger the education, the more business will decide to locate or expand in that community.

“Skilled labor becomes a factor of cost for business. The lower the skill level, the more they have to spend on training to get to the level they want to be.”

Moret said, “Improving student achievement is one of the top two or three things we can do to move up. It is absolutely essential for the quality of the labor supply and quality of life.”

Reforms include reducing the dropout rate.

“Most future jobs will require more training,” he said, “a minimum high school diploma. We need to work on completing that.”