Lafayette Economy:

Lafayette Economy: "Not doing too Well"

Posted: Oct 14, 2009 7:03 AM by Evan Anderson
Updated: Oct 14, 2009 7:03 AM

A Louisiana economist gives Lafayette a two year economic forecast. At Tuesday's annual business luncheon LSU's Loren Scott looks into his crystal ball and gives Acadiana businesses a look into the future.

"Well, it's not doing too well."

As the rest of the country gets back on its feet after a long recession, and people begin to retain confidence in their local economy, here in Acadiana, professor Emeritus in Economics at LSU Dr. Loren Scott says a tax proposal has already sent a chill through the oil industry causing massive layoffs.

"But, you shouldn't be using jobs at all, given the high price of oil, high price of natural gas, under normal circumstances, you would be rockin and rollin." said Scott

But, that's not the case, the Lafayette economy could lose jobs. The reason, Scott says, President Obama's $33 billion dollar proposal in new taxes on the industry.

"So the industry is just kind of waiting to see if this tax is actually going to be passed." said Scott

Scott says company's are unwilling to go out and invest in new wells if it looks like they're going to be faced with new taxes.

He says seldom has the Lafayette economy hung by such a slender thread over the next two years. The tax proposal has caused a huge drop in the rig count and created job losses in Lafayette, despite high oil prices.

"The rig count has dropped from 22 down to about 12, so it's down in half!" said Scott

Statewide, the count is down from about 190 to 130. Doctor Scott predicts the Lafayette economy will add only about 1700 jobs over the next two years, but it depends largely on whether this new tax is stopped or at least modified.

"And if they pass these taxes, it's really gonna be tough for the city to move forward." said Scott

Doctor Scott says the $33 billion dollar proposal is the string that will determine Lafayette's future over the next two years.