We wish it weren’t so. But the evidence keeps coming in that states such as Texas and its Sun Belt neighbors are doing something right in promoting business and jobs creation, and California is doing something terribly wrong. The U.S. Census Bureau just released estimates of the top 10 fastest-growing metropolitan areas, by population, from April 1, 2010, to July 1, 2011. Not one was in California.
The fastest-growing was Kennewick-Pasco-Richland, Wash., which grew 4.3 percent during the 15-month period. It enjoys a diverse economy and Washington’s lack of a state income tax. Second-fastest growing was Austin-Round Rock-San Marcos, Texas, at 3.9 percent. It has become an educational and high-tech powerhouse and — notice a trend? — Texas has no state income tax.
Third was Hinesville-Stewart, Ga., rising at 3.4 percent. Although Georgia has a 6 percent state top income-tax rate, that’s still well below California’s 10.3 percent top rate. But the area also benefits from federal expenditures at Fort Stewart, home of the Army’s 3rd Infantry Division, the largest military facility in the Eastern United States.
Fourth was McAllen-Edinburg-Mission, Texas, growing at 3 percent. Former California Assemblyman Chuck DeVore, R-Irvine, recently moved to Texas and has been researching why the Lone Star State has been rising so fast. He told us that the national average for spending on state and local governments is 19.8 percent of the economy. But in California, it’s well above that, at 22.5 percent. While in Texas, it’s well below that, at 15.4 percent.
Put another way, California spends 46 percent more than does Texas on state and local government, as a share of the total economy. That funds a state government that, as our endemic deficits and failing education system show, just isn’t achieving. Mr. DeVore pointed out that, of the 10 largest states by population, on educational achievement Texas scored first, and California last.
“California has higher taxes and more regulators,” he observed. “More regulators bring more rules. Businesses ask themselves, ‘Where can I go where government bothers me less and takes less of my money?’ There’s no question it’s Texas.”
He also pointed out an interesting comparison. In the California Legislature, just 18 percent of the majority Democrats held jobs in business, farming or medicine before being elected; the rest came from backgrounds in government or community organizing, or were lawyers. By contrast, for Texas’ majority Republicans in their legislature, 75 percent had been in medicine, business or farming. And in the Lone Star State, he added, even Democrats are more than twice as likely to have private-sector backgrounds than are their Democratic legislative counterparts in the Golden State.
“It’s a cultural difference” he said of that dichotomy. “There’s a different attitude here than in California.” That attitude is one that understands that businesses need to be left alone to create products and jobs. By contrast, in California the “dream” — or delusion — is that jobs somehow are created by rubbing a magic lamp, then a genie appears named “high-speed rail” or “green jobs.”
Things aren’t going to change until Californians come to their senses by turning down all bonds, tax increases and spending schemes put on state and local ballots. And when they replace the lifetime government functionaries in the Legislature with folks with long experience in the real world of work, struggle, profit and loss in the private sector.
Reprinted from the Orange County Register