Louisiana lawmakers have spent the past several weeks listening to public testimony and hearing directly from their constituents about specific budget needs, including in education, health care, and critical infrastructure. Now add to those calls the pressure to fund teacher pay raises after voters rejected Constitutional Amendment #3. The response: the state simply lacks the money.
But Louisiana’s budget problem is not merely a revenue problem or even a dedicated funds problem. It is also a self-inflicted economic growth problem.
According the Pelican Institute’s recent economic analysis, Louisiana’s decade-long wave of coastal lawsuits against energy producers has inflicted enormous damage on the state economy. Researchers estimate that Louisiana has lost more than $600 billion in economic activity since 2009 as the state’s share of U.S. GDP fell from 1.4% to 1.1%.
At the same time, Louisiana’s offshore energy sector has collapsed relative to competing regions. Offshore reserves in Louisiana state waters have declined 42%, while reserves in federal Gulf waters declined just 4.6%. Offshore production in Louisiana waters fell 56%, even as federal offshore production increased 15%.
Louisiana energy employment has fallen 37% since 2009, compared to a 24% national decline, while the state has lost approximately $1.1 billion in oil and gas payrolls since 2014, translating into roughly $70 million in lost state and local tax revenue. State mineral royalties have been cut in half from $404 million per year (2009–2013) to $190 million per year over the ten-year period ending in 2024.
And those losses come on top of earlier Pelican Institute findings showing coastal litigation cost Louisiana between $44 million and $113 million annually and directly contributed to the loss of at least 2,000 jobs in the years immediately following the lawsuits.
That increased tax revenue would have come in because of better opportunity for Louisiana families. The money could have gone toward teacher pay raises, roads and bridges, coastal restoration, public safety, NOW waivers for families caring for disabled loved ones, or fully funding educational opportunities like LA GATOR.
Instead, Louisiana has spent years signaling to investors that the state is hostile to one of its largest industries.
With more than 40 lawsuits targeting hundreds of companies for activities dating back decades—many of which were lawful and federally permitted at the time, the result has been predictable: capital flowed elsewhere.
A growing economy generates recurring revenue. A shrinking economy forces lawmakers into perpetual fights over scarcity.
Louisiana cannot litigate its way to prosperity.
If the state wants more competitive teacher pay, better infrastructure, and greater educational opportunity, it needs an economy capable of generating the revenues to support those priorities. That starts with restoring legal certainty and rebuilding confidence that Louisiana is a place where major industries can invest, grow, and create jobs—not merely defend themselves in court for another decade.
