Confronting the Sacred Cows: How We Can REALLY Change Louisiana

Guest Post By State Representative Chuck Owen

This is Part One of a two part series from State Representative Chuck Owen.

Now that we have finished the election season and the lineup is set for who will be in key government positions across our state, it’s time to begin preparations for life in Louisiana under a new gubernatorial administration and a non-Vichy style legislature. It’s a good time and appropriate to put some marks on the wall with regards to possibilities and intentions for our state. These possibilities and intentions are my own, and do not reflect the stances of the incoming Landry Administration, nor anyone else, for that matter. I say that because I haven’t bounced these ideas off the Governor-elect, nor his team. They are busy doing what they are doing, and I am busy doing what I am doing. There are a lot of people getting ready to help our new Governor and other state-wide officials REALLY change Louisiana. I count myself in this number and am ready to get to work. But let there be no mistake:  We must have real change and we must act with boldness and swiftly.

We can’t change our beloved Louisiana unless we are willing to confront or deal with the sacred cows of the state. For those unfamiliar, the term sacred cow refers to a firmly held belief, person or institution that is so revered that it is beyond criticism or opposition. In Louisiana, it’s hard getting some to admit the sacred cows even exist. It didn’t take me long after being elected 4 years ago to find out we have a litany of sacred cows in Louisiana. There are institutions, actions of institutions, organizations, and frameworks that have been in place for so long that many people believe we HAVE to keep them because we’ve always had them.    

I’m not a person who worships sacred cows. I don’t believe in them and I am convinced we have to substantially alter, do away with or really change some of the things we’re used to if we want to move forward. And let there be no mistake: I wish to see Louisiana move forward. That’s why I volunteered for the job of State Representative.    

We must be willing to examine and change nearly everything we do in Louisiana. I blame the mess we are in on governors and legislators who have, for decades, failed to address and eliminate the sacred cows. For decades, we tip-toed around the festering problems in our state and put band aids on them and hoped they’d either get better or go away. These problems almost all radiate from a couple of issues.  The “old ways” in Louisiana have gotten us to the place where we now find ourselves.  This two-part article examines some of the biggest challenges we have in our state and offers up some possible solutions for these problems. Part 1 deals mostly with economic issues; Part 2 addresses education, the Constitution and a component of our state budget.   Here goes:

Item 1:   The market economy

I believe we must embrace the market economy and free enterprise in every fashion.    A functioning market economy that generates healthy revenue is Louisiana’s quickest way to prosperity and safety. With a healthy economy, we wind up with a strong tax base that can support our needs for infrastructure, public safety, and education. How we change to a market economy from the current (poorly) planned economy is the trick.  There are a number of sub-elements to this discussion.

We need to remove any and all barriers to business to make Louisiana a place where businesses will want to locate. We must be a state that attracts businesses and maximizes the potential of our state and encourages (structurally, in principle, and in fact) entrepreneurs.

This starts with changing the legal environment and the threat of lawsuits that loom around every prospective entrepreneur, every established business and every mom-and-pop store in our state.  Our legal environment is NOT the fault of our lawyers.   This needs to be clearly stated---I do not blame lawyers for the judicial and litigious hell-hole that is Louisiana.   Previous legislatures and governors have created this mess and have failed repeatedly to solve it. I’m not mad at any billboard lawyer or anyone who has helped anyone else get their “fair share.” Blaming lawyers for this is like blaming grizzly bears for eating calves. It’s what they do. The bear needs to be restrained or encouraged to eat something else if you want to keep your livestock.

No, I’m not advocating for exterminating bears (or lawyers). I’m for changing the environment. We tried some of this in the past 4 years, but the legislature thwarted itself. Senior leadership allowed only half-measures and the result was the opposite of what we needed.

The result of this legal environment is all around us. Insurance companies are being choked out. Many are leaving the state or are charging confiscatory premiums that are running our mom and pop and even large businesses out of state. And for the record, I don’t blame the insurance companies any more than I blame the lawyers.   The insurance company’s job is to earn a profit; they can’t print money and when their costs go up, so do their premiums. A number of insurance companies have folded their proverbial tents and are leaving or have left Louisiana---the cost of doing business here is high and getting higher. I have a litany of examples I could offer of businesses and churches being left out to dry because of high insurance costs. These costs are ultimately passed on to consumers who are struggling to sustain their livelihoods. Ask the owner of a trucking company or the owner of a lone logging truck or a wrecker about their efforts to stay above water. Many folks are often left with insurance they can’t afford OR insurance being cancelled because the company can’t afford to do business here. Something caused this insurance to go up.

We need to confront this problem and the legislature and Governor need to do something quickly and boldly. We know many of the items that need to be confronted. The question is can we and or will we have the courage to undertake this confrontation---to challenge the sacred cow of truly supporting a market economy.

Item 2 is our tax structure.    

While we’re not the MOST taxed state in the nation, we have a complex structure that is hostile to both businesses and individuals. We have structures in place that make the cost of business simply unattractive for new concerns or entrepreneurs. The tax structure is a critical component of supporting a market economy and the two items go hand-in-hand.

Consider our Inventory Tax for example. People who aren’t in business don’t often know this, but Louisiana has an inventory tax. Yes, a tax on inventory. Whatever inventory you have on site on 31 December is taxed. Why? Because it’s a sacred cow that we can’t touch. We couldn’t even get a hearing on removing this in previous years for some unknown reason. A tax like this introduces hostility in the mix for new and thriving businesses. There are businesses near State borders who are forced to rent warehouses across the state line to go and move their inventory, so tax won’t be placed on the back of the entities already struggling to stay afloat.

The fact that we HAVE an income tax is an impediment. Most of the states we compete with economically don’t have one. Money goes where it is treated best and when given the option of moving to or retiring in a state with an income tax or one without such a burden, imagine who wins. The guardians of this sacred cow will scream about “fair share” and “how do you pay for that?” There are lots of ways, but we have to have the courage to speak of them and propose them. There are also lots of other taxes that need to be changed or eliminated in order to create the environment that can hold up a healthy economy.

Item 3:  Licensing

The Bayou State is one of the most stringently licensed in the nation. If you want to see an entire field of sacred cows, just look at the list of the professions and trades we license. This is something that MUST be challenged and significantly reformed---meaning CHANGED.    

We license skilled and unskilled trades. We make it next to impossible to come to Louisiana and find employment if you’re a licensed professional or skilled craftsman. We make it very difficult to come here and work in almost every sector of the economy, even if you have a valid license or credential from another state.  For some reason or another, we think our licensing is better than others around the country. If we were prosperous and people were flocking across our borders to come and work here, there might be an argument for our current paradigm, but that emphatically is NOT the case.     

Most occupational licensing is a form of restraint of trade that keeps motivated, trained and job-ready professionals and craftsmen outside our borders. Louisiana needs to follow the lead of other forward-leaning states like Arizona and adopt universal license recognition. There is a strong body of belief and now evidence that accepting the valid licenses of skilled craftsmen and professionals will lead to something called in-migration…meaning people will be moving TO our state as opposed to running for the border.

And everything needs to be on the table and up for consideration. Except lawyers.  Our law in Louisiana is unique and we just can’t go there. But every other profession, from MDs, to surveyors, to plumbers, to engineers, to hairdressers and real estate professionals need to be up for review. Arizona has been flooded with professionals and craftsmen in the past 5 years and their results are phenomenal. This is a must-have for our state if we want to see improvement and growth. And when we do this, the incoming wave of professionals will add to our healthy economy and our overall quality of life.

In Part 2 of the article, we’ll address three VERY sacred cows---Education, the State Constitution and the state’s construction budget.

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