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Louisiana at road's fork with economy, budget
Written by  // Monday, 26 January 2015 15:36 //

waguespack-compressedby Stephen Waguespack, President and CEO of Louisiana Association of Business and Industry

Louisiana is on the road to progress, but has suddenly come to a crossroads.

 

The state’s budget challenges are a hot topic these days, yet many of the root causes have not been fully explored. Instead of targeting items such as runway entitlement costs that continue to drain more and more dollars out of our schools or passing reforms to give educators the autonomy they deserve to compete aggressively for students and research, most of the solutions being considered seem to focus on more tax dollars to mask the unsustainable and escalating costs our government faces.

The continuing growth of our private sector economy is impressive but still in its infancy, as it recovers from the national recession, therefore it has not yet resulted in the expansion of government revenues many long to see. Some have argued we should no longer wait for that to happen and, instead of continuing this path to prosperity, they will propose ideas to trade this long-term growth in exchange for short-term relief. We should not be so cavalier with our future.

While this fork in the road does present a complicated challenge, we should all reflect with pride the road we have taken to get here and heed the lessons of that path. 2014 was a great year for business in Louisiana and our people are the benefit of this growth.

We rank No. 1 in the nation in export growth and intensity. We lead the nation in manufacturing growth and our per capita income growth is second in the U.S. Last year, Louisiana hit the two million mark in our civilian labor force – a historic number of Louisiana workers that continues to grow each and every month.

We are poised to break a record number of non-farm jobs early this year. Economists estimate more than 75,000 jobs annually over the next 10 years, of which 25,000 are new jobs every year.

And future growth is not only in the industrial sector. New areas of the Louisiana economy are also growing, such as health care, software, digital media and telecommunications. And best of all, it doesn’t stop there and we have not yet reached our peak.

More than $100 billion in new and expanded projects have been announced for the state, with areas like Lake Charles literally on the verge of expansions that will provide unlimited opportunity for that community for generations to come.

As global market pressures dominate our economy more and more each day, our ability to provide affordable energy, a business friendly environment and a fair and competitive tax code will be critical to our continued path to prosperity.

All the data points that for the first time, in a long time, we are finally turning a corner. Pro-growth policies are having an impact on our business, our communities and our quality of life.

What we don’t want to do now is repeat the mistakes of the past, where we take an economic boom for granted and forget the hard fought lessons of how we got here. If we get lost and turned all around, we may quickly find our economy back on a rocky road.

The Louisiana Legislature will soon convene for eight weeks from April to June and our path to prosperity runs smack dab through the middle of that session on its way to this fall’s elections. There are several actions that build on the foundation of sustainable growth priorities we should pursue, including a continued commitment to reforming our infrastructure, legal and educational systems.

But at a minimum, we must ensure that no harm is done to take Louisiana off this upward trajectory. We don’t need additional baggage that simply weighs us down and complicates our path to historic growth.

Despite our unprecedented potential that has fueled such a positive outlook for our economy, the focus of the Capitol will be more on the public sector budget challenges rather than the unlimited opportunity of our private sector economy.

With apologies to Robert Frost, Louisiana once again finds itself at a fork in the road and it unfortunately cannot travel both. One path diverts us from our course and deceptively appears at the onset to be flat and clear, tantalizing us with the allure of an easier route to a better place. The other is more complex and is steep and fraught with twists and turns. While the course is far more challenging, the final destination has the potential to be exceptional and is likely to be somewhere Louisiana has never been.

In the past at similar intersections, we have usually taken the shortcut. Perhaps this time we should embark on the road less traveled by and, just this once, take the long way home. If could just make all the difference.

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