Personal income growth slows in Louisiana

(AP)Louisiana’s growth in first-quarter personal income lagged behind the national average – a reversal from the previous quarter – and slowed down slightly from the second half of 2006, the U.S. Bureau of Economic Analysis reported Thursday.

BEA said personal income in Louisiana grew at a 1.6 percent clip from January through March, compared with 1.9 percent in both the third and fourth quarters of 2006. After hurricanes Katrina and Rita, the figure dropped 0.9 percent in the first quarter 2006, followed by a 0.6 percent gain in the second quarter of 2006.

Personal income is the income received by all people from all sources.

Nationally, personal income grew by 2.2 percent in the latest quarter, up from 1.4 percent in the fourth quarter of 2006, BEA said. Only five states grew faster than the national average _ led by New York with 4.7 percent, followed by Connecticut, New Jersey, Illinois and Delaware.

Louisiana’s growth ranked it 37th in the nation. Among the southeastern states, Louisiana only exceeded 39th-ranked Mississippi and 41st-ranked Tennessee.

North Carolina was the top-ranked southeastern state at No. 8, followed by South Carolina at No. 10, Alabama at No. 11, Georgia at No. 12, Kentucky at No. 16, Florida at No. 23, Virginia at No. 24 and Arkansas at No. 31 West Virginia at No. 35. Texas, which was included among southwestern states in the report, was ranked 28th.

Economist Loren Scott said Louisiana’s change in growth was not significant and the state fell in the overall rankings because of big growth in some states, such as New York, that had lagged the previous quarter.

But according to the report, about a sixth of the personal income growth during the last quarter in Louisiana was due to state and local governments – slightly more than twice the national average and the highest single factor in the state’s growth.

“That’s not the textbook way,” Scott said. “You want government to grow at the rate of the economy, not beyond the economy.”

The BEA study was released a day after the Louisiana Legislature sent Gov. Kathleen Blanco a record $29.7 billion state budget, $3 billion more than last year’s spending plan. The budget bill calls for the addition of more than 1,100 state employees.

In a report issued in March, the U.S. Commerce Department said Louisiana recorded the nation’s largest growth in per capita income in 2006, a gain coming from wage increases following the storms and the loss of 200,000 residents, many from lower-income ranges. Per capita income is calculated by dividing the total income of a population by the total number of people in the population.

The 25.5 percent increase last year followed a 9 percent drop in 2005, a year in which there was massive unemployment following the two storms. But the increase only pushed the state from the bottom to 41st in the nation, the Commerce Department said.