Louisiana Is Losing the Race—and It’s Time to Get Back to Basics

Originally posted to The Pelican Institute.

​Too many people are leaving, and bad policy is to blame.

People are voting with their feet, and Louisiana keeps coming in last.

Between 2012 and 2022, Louisiana lost 120,000 residents to other states through net domestic outmigration, according to VoteWithYourFeet.net, published by the Committee to Unleash Prosperity. That’s not a weather problem. It’s not a geography problem. It’s a policy problem.

This trend has been years in the making, and so far, new leadership has had limited success in reversing course. If Louisiana wants to stop bleeding population and economic vitality, it must get back to economic basics: spend less, tax less, regulate less.

The Competition Is Real—and Louisiana Is Losing

In a mobile, choice-driven economy, states are in constant competition to attract workers, families, capital, and innovation. Some are winning.

• Texas gained nearly 1.7 million people over the same period.
• Florida added 1.9 million, becoming the new benchmark for economic migration.
• Tennessee, Utah, Idaho, and North Carolina all posted major gains.

These aren’t just southern or “sunbelt” states—they’re competitive states. They attract residents because they’ve embraced the fundamentals: limited government, low taxes, and a pro-growth mindset.

Louisiana? It’s still doing the opposite in many ways, despite some recent progress.

According to the Tax Foundation, Louisiana ranks in the bottom 10 for overall tax competitiveness. Its combined state and local sales tax rate is among the highest in the country. Meanwhile, its income tax, while modestly reformed in recent years, still penalizes productivity and adds unnecessary complexity.

And then there’s the spending problem.

Big Government, Small Growth

Louisiana spends far more than faster-growing states. The Pelican Institute has long warned that excessive government bloat in Louisiana not only crowds out private sector growth but also makes the state less agile when opportunities arise.

Rather than putting taxpayer dollars into broad-based reforms, too much gets funneled into outdated programs, politically connected projects, and economic development schemes that rarely deliver.

All of this creates a toxic cocktail: higher taxes, less opportunity, and slower growth.

And people are responding by leaving.

A Better Model Exists

This isn’t guesswork—it’s observation. We know what works because other states are doing it right now.

• Florida has no income tax and a lean budget, yet it’s growing faster than ever.
• Tennessee eliminated its income tax and capped spending growth—and it’s thriving.
• Arkansas is accelerating its path to zero income taxes, following a flat tax cut and strong budget controls.

They’re not just reducing taxes. They’re building sustainable, predictable fiscal environments that give businesses and families confidence to stay and grow.

Louisiana should be doing the same. Instead, it’s still trying to patch together top-down solutions, hoping federal subsidies or one-time handouts will spark a turnaround.

That’s not reform. It’s rearranging deck chairs.

What Louisiana Must Do—Now

If Louisiana wants to compete, here’s where to start:

1. Adopt a responsible state budget with real spending limits—tie max state spending growth to population growth plus inflation. This cap forces prioritization and ends the cycle of boom-and-bust budgeting.
2. Phase out the state income tax—replace it with surplus funds over time towards a flat, broad-based consumption tax that doesn’t penalize work, savings, or investment.
3. End corporate welfare—stop subsidizing individual firms and industries. Let competition—not favoritism—drive economic development.
4. Streamline regulations and licensing—Louisiana’s tangled bureaucracy holds back entrepreneurship and job creation. Cut red tape and let the private sector do what it does best.

There’s no need to reinvent the wheel. The models exist. What’s been missing is the political will to execute.

Conclusions

Louisiana has the raw ingredients to thrive: abundant natural resources, cultural richness, and strategic location. But none of that matters if people keep leaving.

Economic growth is not about programs or press conferences. It’s about creating an environment where families want to live, businesses want to invest, and freedom is respected.

Until Louisiana embraces that, it will keep losing—not just residents, but its future.
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The time to compete is now.