What Texas Can Teach Us

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    May 27, 2011 3:49 PM GMT
    http://washingtonexaminer.com/blogs/beltway-confidential/2011/05/what-texas-can-teach-us

    If you want to see a place where the private sector in America has been booming and generating jobs, you should look at Texas. That’s my take from these absolutely fascinating numbers compiled from Bureau of Labor Statistics figures by The Business Journals, tracking the increase or decrease in private sector jobs in the ten years between April 2001 and April 2011. Any precise ten-year period is somewhat arbitrary, of course, since the two endpoints can fall at different points in the business cycle, and so picking different starting and end points will produce different pictures. But the numbers here look pretty unambiguous.

    In those 10 years, Texas gained 732,800 private sector jobs, far ahead of the number two and three states, Arizona (90,200) and Nevada (90,000). The nation overall lost more than 2 million private sector jobs, with the biggest losses coming in California (623,700), Michigan (619,200) and Ohio (460,900).

    Texas’s gain was also impressive as a percentage of jobs at the beginning of the period. Texas had job growth of 9%, more than any other state except much smaller North Dakota (19%), Alaska (17%), Wyoming (16%), Montana (12%) and Utah (10%). The biggest losers in percentage terms, by far, were Michigan (16%) and Ohio (10%).

    Obviously Michigan and Ohio were hurt by the parlous condition of the Detroit-based auto firms and other manufacturers; North Dakota, Alaska, Wyoming and Montana were helped by local oil, gas and coal booms. Texas and California are both too big to be explained by just local factors.

    The lesson of the previous decade seems clear: if you take a previously prosperous and creative state and subject it to high taxes and intrusive regulations, it loses 5% of its private sector jobs; if you take a previously somewhat less prosperous and creative state and govern it with low taxes and light regulation, it gains 9% more jobs, even as the nation’s economy is suffering.

    I’ve explored previously this contrast between our two largest states. Here’s another set of numbers about our second and third largest states that tells a story about what has happened over a longer period of time. In 1970 New York had 18 million people. In 2010 New York had 19 million people. In 1970 Texas had 11 million people. In 2010 Texas had 25 million people.

    Don’t tell me public policy doesn’t account for much of the difference.
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    May 27, 2011 4:57 PM GMT
    More facts about Texas:
    "Perry, a Republican, campaigned on the strength of the Texas economy and made political hay of the fact the Lone Star state had avoided California's massive deficit, pegged at $25.4 billion through the upcoming budget year. Now Texas faces a budget deficit estimated as high as $27 billion for the upcoming two-year cycle of 2012-2013."
    http://www.reuters.com/article/2011/02/04/us-usa-deficits-states-idUSTRE71314420110204


    In addition, Texas ranks dead last (worst) in:
    Residents over age 25 without a high school diploma
    Average credit score
    Voter participation
    Residents without Health Insurance
    Cancer-causing compounds released into the air
    Toxic chemicals released into the water
    Toxic chemicals released underground


    Some good news: Texas is no longer No. 50 in teen birth rates, having moved to 48th.

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    May 27, 2011 6:54 PM GMT
    catfish5 saidMore facts about Texas:
    "Perry, a Republican, campaigned on the strength of the Texas economy and made political hay of the fact the Lone Star state had avoided California's massive deficit, pegged at $25.4 billion through the upcoming budget year. Now Texas faces a budget deficit estimated as high as $27 billion for the upcoming two-year cycle of 2012-2013."
    http://www.reuters.com/article/2011/02/04/us-usa-deficits-states-idUSTRE71314420110204


    In addition, Texas ranks dead last (worst) in:
    Residents over age 25 without a high school diploma
    Average credit score
    Voter participation
    Residents without Health Insurance
    Cancer-causing compounds released into the air
    Toxic chemicals released into the water
    Toxic chemicals released underground


    Some good news: Texas is no longer No. 50 in teen birth rates, having moved to 48th.



    Texas is not perfect and no one is claiming they are except for that straw man you seem to be fighting - but given that it has a 9.4b rainy day fund is in a lot better fiscal shape than many other states. The deficit of 27b also doesn't factor in the anticipated cuts - and it's over a 2 year cycle (ie it's half that). A few other salient facts that you seem to omit given that they provide context:

    - Texas is experiencing unexpected tax revenue increases of 7.8% for Q1 over the year previous.
    - The revenue shortfall over this cycle is only actually anticipated to be about 15b - but this rises to 26-27b if you factor in the spending that will need to be made to keep pace with growth
    - between 2000-2010 alone, Texas gained 4.2 million people (http://www.star-telegram.com/2010/12/21/2720043/texas-population-tops-25-million.html)
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    May 27, 2011 8:06 PM GMT
    This article points out several political policies regarding Texas:

    http://www.nytimes.com/2011/01/07/opinion/07krugman.html?_r=1&ref=opinion

    "Its governor boasted that its budget was in good shape thanks to his “tough conservative decisions.”

    "Among the states, Texas ranks near the bottom in education spending per pupil, while leading the nation in the percentage of residents without health insurance. It’s hard to imagine what will happen if the state tries to eliminate its huge deficit purely through further cuts".

    "Right now, triumphant conservatives in Washington are declaring that they can cut taxes and still balance the budget by slashing spending. Yet they haven’t been able to do that even in Texas, which is willing both to impose great pain (by its stinginess on health care) and to shortchange the future (by neglecting education). How are they supposed to pull it off nationally?

    People used to say that the future happens first in California, but these days what happens in Texas is probably a better omen. And what we’re seeing right now is a future that doesn’t work".

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    May 27, 2011 9:21 PM GMT
    catfish5 saidThis article points out several political policies regarding Texas:

    http://www.nytimes.com/2011/01/07/opinion/07krugman.html?_r=1&ref=opinion

    People used to say that the future happens first in California, but these days what happens in Texas is probably a better omen. And what we’re seeing right now is a future that doesn’t work".


    Except that Krugman's columns have been easily and consistently debunked - especially in this case. He notes spending - but Texas gets consistently better value for the money that they spend compared to say California.

    http://washingtonexaminer.com/politics/low-tax-texas-beats-big-government-california

    Texas is a different story. 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. Public employee unions are weak or nonexistent.

    But Texas seems to be delivering superior services. Its teachers are paid less than California's. But its test scores -- and with a demographically similar school population -- are higher. California's once fabled freeways are crumbling and crowded. Texas has built gleaming new highways in metro Houston and Dallas-Fort Worth.

    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.


    What's important to recognize as well however is that Texas does budgeting differently than other states. But it also starts out in a far better position (should they ultimately decide that they need to raise taxes for instance).

    http://www.nationalreview.com/exchequer/256614/no-paul-krugman-texas-not-broke

    Except that Texas doesn’t do shortfalls. Texas starts from scratch: Every year is basically Year Zero when it comes to the state budget — there is no assumption that next year’s funding will match or exceed this year’s, and the state’s constitution explicitly forbids any legislature to tie the hands of a subsequent legislature, financially or otherwise. When necessary, Texas implements zero-baseline budgets, in order to keep the state living within its means, even if Paul Krugman thinks it beastly.

    Rick Perry established a pretty good standard for gubernatorial brass-dangling the last time there was a projected budget shortfall, in 2003. Governor Perry and his colleagues in the Texas legislature took a radical right-wing approach to government budgeting, inasmuch as they started by asking: “How much money do we have?” (Insane, right?)


    I am curious though - why do you still live in Texas if you feel that the quality of life is as poor as you seem to claim?
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    May 28, 2011 12:01 AM GMT
    1)Texas fiscal condition is sound.

    The so-called Texas miracle is in trouble demonstrating that fashioning fiscal policies strictly along low-tax lines doesn't protect you from budget deficits or business slumps or make your residents necessarily happy or healthy.

    Billions of dollars in government red ink.
    Classroom spending near the bottom of national rankings and heading down.
    Desperate appeals to Uncle Sam to stave off cuts to the poor and elderly [and for disaster relief].
    Unemployment soared and state tax revenue came in sharply below estimates during the recession, and the deficit mushroomed.

    http://articles.latimes.com/2011/feb/09/business/la-fi-hiltzik-20110209

    2)Texas seems to be delivering superior services.

    Texas currently ranks 44th national in education spending per pupil. How can the legislature cut it any further?
    http://www.truthaboutschools.org/2011/03/27/texas-44th-in-spending/

    Legislative negotiators agreed on a $172.3 billion, two-year budget plan that would cut back public school spending by $4 billion, provide financial aid to fewer college students, and put off $4.8 billion in projected Medicaid costs until the 2012 session.

    http://www.mysanantonio.com/news/politics/texas_legislature/article/Lean-times-ahead-in-Texas-1398026.php

    http://iu.qs.com/2011/03/02/texas-budget-shortfall-could-mean-steep-cuts-into-he-funding/

    Cuts to education will have long term consequences.
    http://iu.qs.com/2011/03/02/texas-budget-shortfall-could-mean-steep-cuts-into-he-funding/
    Texas also ranks last in the number of residents with health insurance.

    3)Texas is a better value for the money.

    Only if you are wealthy, a big business, a gun owner, or apathetic to the problems of lower income Americans, elderly, women, and children.

    4) What is important to remember is that Texas does budgeting different than other states.

    When Texas lawmakers said they wanted to run Texas like a business, they left out the part about using Enron and Countrywide as their models.

    [url]http://www.texastribune.org/texas-taxes/budget/in-texas-a-businesslike-budget-after-a-fashion/?utm_source=texastribune.org&utm_medium=rss&utm_campaign=Tribune%20Feed:%20Main%20Feed[/url]
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    May 28, 2011 12:14 AM GMT
    Cat5ish -

    These two will never understand that you may live in Texas with an excellent quality of life for yourself and believe that it's desirable to possibly pay more tax that other citizens may have a better quality of life.
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    May 28, 2011 12:16 AM GMT
    catfish5 said1)Texas fiscal condition is sound.

    The so-called Texas miracle is in trouble demonstrating that fashioning fiscal policies strictly along low-tax lines doesn't protect you from budget deficits or business slumps or make your residents necessarily happy or healthy.

    Billions of dollars in government red ink.
    Classroom spending near the bottom of national rankings and heading down.
    Desperate appeals to Uncle Sam to stave off cuts to the poor and elderly [and for disaster relief].
    Unemployment soared and state tax revenue came in sharply below estimates during the recession, and the deficit mushroomed.

    http://articles.latimes.com/2011/feb/09/business/la-fi-hiltzik-20110209

    2)Texas seems to be delivering superior services.

    Texas currently ranks 44th national in education spending per pupil. How can the legislature cut it any further?
    http://www.truthaboutschools.org/2011/03/27/texas-44th-in-spending/

    Legislative negotiators agreed on a $172.3 billion, two-year budget plan that would cut back public school spending by $4 billion, provide financial aid to fewer college students, and put off $4.8 billion in projected Medicaid costs until the 2012 session.

    http://www.mysanantonio.com/news/politics/texas_legislature/article/Lean-times-ahead-in-Texas-1398026.php

    http://iu.qs.com/2011/03/02/texas-budget-shortfall-could-mean-steep-cuts-into-he-funding/

    Cuts to education will have long term consequences.
    http://iu.qs.com/2011/03/02/texas-budget-shortfall-could-mean-steep-cuts-into-he-funding/
    Texas also ranks last in the number of residents with health insurance.

    3)Texas is a better value for the money.

    Only if you are wealthy, a big business, a gun owner, or apathetic to the problems of lower income Americans, elderly, women, and children.

    4) What is important to remember is that Texas does budgeting different than other states.

    When Texas lawmakers said they wanted to run Texas like a business, they left out the part about using Enron and Countrywide as their models.

    [url]http://www.texastribune.org/texas-taxes/budget/in-texas-a-businesslike-budget-after-a-fashion/?utm_source=texastribune.org&utm_medium=rss&utm_campaign=Tribune%20Feed:%20Main%20Feed[/url]


    Just looking at your first article - and a thorough debunking - not surprisingly by a liberal attempting to defend California's bad policy decisions: http://patterico.com/2011/02/09/michael-hiltziks-hackery-in-making-texas-sound-as-bad-as-california/

    The irony of course is that despite lower classroom spending, Texas gets consistently better results than California that has one of the highest. One of the remarkable things about the Texas economy is that while it has seen a rise in unemployment, it has also seen an even greater rise of people moving to Texas presumably to find jobs. Thus this unemployment rate is not surprising.
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    May 28, 2011 5:27 AM GMT
    southbeach1500 said
    riddler78 said
    I am curious though - why do you still live in Texas if you feel that the quality of life is as poor as you seem to claim?


    Well now, that's two of us who have asked the Catfish that question... still no answer though....


    Why does riddler live in the socialist haven of Canada with all the free healthcare? icon_rolleyes.gif
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    May 28, 2011 5:37 AM GMT
    Christian73 said
    southbeach1500 said
    riddler78 said
    I am curious though - why do you still live in Texas if you feel that the quality of life is as poor as you seem to claim?


    Well now, that's two of us who have asked the Catfish that question... still no answer though....


    Why does riddler live in the socialist haven of Canada with all the free healthcare? icon_rolleyes.gif


    I think that's a fair question. I will likely have to move in the next few years to facilitate the expansion of my businesses. I recently moved to Toronto but will likely move to the US. I travel a lot to the US as it is. As for socialist haven? You do realize of course our corporate taxes are lower than yours?
  • roadbikeRob

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    May 28, 2011 4:41 PM GMT
    Texas might have a poor educational system and basement level state government services but Texas has an excellent highway network and apparently it doesnt have a problem blowing more money on more roads and superhighways despite its serious budget problems. I guess if Texas wants to build the proposed I-69 NAFTA highway and the long proposed I-27 extension from Lubbock to Del Rio, they would probably cut more from education, health care, and other services and reduce them lower from their already scandalous levels.