Low-tax Texas beats Big-government California

Despite similarities in their histories and demographic makeup, Texas and California differ greatly in terms of their respective approaches to public policy. With its low taxes and "hands-off" economic policies, Texas' economy is booming and the state is experiencing a population inflow. Meanwhile, California's recent experience has been quite the opposite, thanks to its expensive and increasingly incompetent government, says Michael Barone, a resident fellow at the American Enterprise Institute (AEI).

California has gone in for big government in a big way, says Barone:

Democrats hold big margins in the legislature largely because affluent voters in Los Angeles and the San Francisco Bay Area favour their liberal positions on cultural issues.

Those Democratic majorities have obediently done the bidding of public employee unions to the point that state government faces huge budget deficits.

Gov. Arnold Schwarzenegger's attempt to reduce the power of the Democratic-union combine with referenda was defeated in 2005 when public employee unions poured $100 million – all originally extracted from taxpayers – into effective TV ads.

Texas differs vividly from California, says Barone:

Texas has low taxes – and no state income taxes – and a much smaller government.

Its legislature meets for only 90 days every two years, compared with California's year-round legislature.

Its fiscal condition is sound and public employee unions are weak or non-existent.

In the meantime, Texas' economy has been booming. Unemployment rates have been below the national average for more than a decade, as companies small and large generate new jobs, says Barone.

And Americans have been voting for Texas with their feet, says Barone:

From 2000 to 2009, some 848,000 people moved from other parts of the United States to Texas, about the same number as moved in from abroad.

That inflow continued in 2008-09, when 143,000 Americans moved into Texas, more than double the number in any other state; at the same time 98,000 were moving out of California.

Texas is on the way to gain four additional House seats and electoral votes in the 2010 reapportionment.

Source: Michael Barone, Low-Tax Texas Beats Big-Government California, Washington Examiner, March 7, 2010.

For text: http://www.washingtonexaminer.com/politics/Low-tax-Texas-beats-big-government-California-86681467.html

For more on Government Issues: http://www.ncpa.org/sub/dpd/index.php?Article_Category=33

First published by the National Center for Policy Analysis, Dallas and Washington, USA

FMF Policy Bulletin/ 16 March 2010