Louisiana has faced significant economic challenges since Governor Jeff Landry took office. The state’s economy has been on a downward trajectory, and the deteriorating insurance market under his administration has exacerbated the housing crisis, making homes unaffordable for many and threatening family stability. Given the challenges the state is facing with the homeowner’s insurance industry, now is not the time for tax cuts for the wealthy while cutting essential services in healthcare, education, and infrastructure. Policies should be centered around strengthening the working class, not exacerbating the wealth disparity.
Economic Downturn Indicators
Governor Landry’s policy decisions have negatively impacted Louisiana’s economy. Budget cuts to vital public services and tax breaks for corporations at the expense of small businesses and working families have reshaped the economic landscape unfavorably. Several key financial indicators highlight this troubling trend:
- Unemployment Rates: Since Governor Landry took office, Louisiana’s unemployment rate has increased. According to the U.S. Bureau of Labor Statistics (BLS), the unemployment rate in Louisiana was 3.7% in January 2023 and increased to 4.0% by June 2024. This indicates stagnation in job growth, particularly in manufacturing, education, and healthcare sectors, leaving many residents struggling.
- Poverty Levels: Governor Landry’s policies have yet to do much to improve the poverty rate. In fact, the poverty rate in the state has ticked up from 18.3% when he assumed office to 18.6% currently. With the budget cuts, more families are living below the poverty line, grappling with financial insecurity and limited access to essential resources. This growing economic disparity is alarming and indicative of broader economic issues.
- State Revenue: Louisiana’s revenue has declined, leading to cuts in critical services such as education, healthcare, and infrastructure. For example, public school funding has been reduced by approximately 15%, and healthcare programs have seen a 10% cut, impacting residents’ quality of life and hindering long-term growth.
Insurance Market Crisis
The deterioration of the insurance market is one of the most significant challenges under Governor Landry’s administration. Homeowners and businesses have faced skyrocketing insurance premiums, creating further economic strain.
Rising Premiums and Reduced Coverage
Insurance companies have raised premiums due to increased risks and financial instability. According to the Louisiana Department of Insurance, the average homeowner’s insurance premium increased by 25% from 2023 to 2024. In coastal areas, premiums have surged even more dramatically, with some homeowners experiencing up to 50% increases.
Additionally, insurers have become more stringent in their coverage policies, reducing the scope of coverage and increasing deductibles. This has led to many homeowners paying more for less protection, heightening their financial insecurity. Reports indicate that the average deductible for hurricane damage has risen from $5,000 to $7,500, putting additional financial strain on residents.
Impact on the Housing Market
The worsening insurance market has directly impacted Louisiana’s housing market. Increased insurance costs have made home ownership unaffordable for many, particularly first-time buyers and low-income families. The state’s housing market has become increasingly inaccessible, with home prices and interest rates soaring beyond the reach of average residents.
Surging mortgage interest rates along with rising insurance costs, has created a perfect storm for a housing crisis. The affordability index for housing in Louisiana has dropped to its lowest level in a decade, indicating that fewer residents can afford to buy homes.
The housing crisis is a symptom of the broader economic decline and a contributing factor. As more families struggle to find affordable housing, the demand for rental properties has surged, driving up rental prices and exacerbating the affordability crisis. According to Rental Real Estate, the average rent for a two-bedroom apartment in Louisiana has increased by approximately 11% over the past year, further straining household budgets.
Specific Policies of Governor Landry
Some issues related to the skyrocketing annual homeowner’s insurance premiums result from Hurricane Ida’s aftermath and undoubtedly existed prior to Landry’s tenure as governor. However, Governor Landry’s tax breaks for corporations come at the expense of poor and working-class Louisianians, as evidenced by the steep budget cuts for essential services.
- Tax Breaks for Corporations: Governor Landry’s administration has granted significant tax breaks to large corporations. While these are meant to attract business investment, they have often come at the expense of small businesses and public services, exacerbating economic inequality and reducing state revenue needed for essential services.
- Budget Cuts: Significant cuts have been made to public services, including education and healthcare. For instance, public school funding has been reduced by 15%, impacting the quality of teaching and long-term economic growth potential. Healthcare programs have seen a 10% cut, affecting the well-being of many residents and increasing financial strain on families.
- Failure to Reform Homeowners Insurance Market: Governor Jeff Landry missed several critical opportunities to make homeowners insurance more affordable in Louisiana. He could have invested in resilient infrastructure to mitigate disaster risks, implemented stringent building codes to enhance structural integrity, and established state-backed insurance programs to provide coverage in high-risk areas. Additionally, by not advocating for regulations to limit annual premium increases and failing to attract new insurers to foster market competition, Landry did not take essential steps that could have stabilized and reduced insurance costs for homeowners.
- Economic Development Overhaul: The “Positioning Louisiana to Win” bill aimed to modernize Louisiana Economic Development (LED) by establishing a private sector-led board and exempting the agency from state procurement and technology services bottlenecks. While intended to attract business, critics argue that the bill has not yet delivered the promised results and has disrupted established processes without immediate benefits.
Need for Change
Louisiana’s current economic trajectory under Governor Jeff Landry’s administration is unsustainable. The state’s declining economy and deteriorating insurance market have created financial insecurity and instability. Policymakers should take swift and decisive action to address these issues and chart a new course for Louisiana’s future.
Investing in job creation, particularly in high-growth sectors, can help reverse the trend of rising unemployment and provide residents with economic opportunities. Strengthening social safety nets and expanding access to essential services can help alleviate the growing poverty crisis and support those hardest hit by the economic downturn.
Comprehensive insurance reform is necessary to stabilize the market and ensure all residents have access to affordable coverage. This will protect homeowners and contribute to the overall stability and resilience of the state’s economy.
Conclusion
Louisiana is at a crossroads. Under Governor Jeff Landry’s tenure, the economic decline highlights the urgent need for change. Although it’s only been one year in to Landry’s administration, the governor’s right wing policies have unquestionably impacted the state’s economy and stands in stark contrast to the fiscal responsibility and economic prosperity demonstrated under governor John Bel’s tenure. Make no mistake – Governor Landry now owns this economy. Addressing the root causes of the state’s economic challenges and implementing policies prioritizing residents’ well-being can help Louisiana emerge stronger and more resilient. A new vision for Louisiana’s future is essential—one that values strengthening our middle class over further enriching corporations. For decades we have experimented with alternating Republican and Democratic administrations with a clear and consistent pattern: Louisiana’s economy is always healthier under Democratic leadership.
