While California seeks more ways to tax success, it excels at subsidizing poverty.I decided to take a look at his arguments more closely, to see whether his claims were true that people are fleeing California and that its business climate stifles job creation, unlike Texas.
Spoiler alert: He's full of shit. Details below the fold.
I moved to Texas late last year, joining the 2 million Californians who have packed up for greener pastures in the past ten years, with Texas the most common destination.I couldn't confirm that 2 million number from some quick digging into Census data, but I did get their 2010 numbers (PDF). And it's true! Californians leave their state.
In fact, in 2010, 573,988 people left California, or 1.5 percent of its total population.
Then again, 411,641 people left Texas, or 1.6 of its total population.
So from a proportional basis, more Texans that year fled their state than Golden Staters.
But it's also true Texas is still the nation's preferred destination—486,558 domestic immigrants in 2010, compared to 444,749 for California. It just turns out that once they arrive, (slightly) more people want to leave Texas than California.
In his State-of-the-State address this January, California governor Jerry Brown said, “Contrary to those declinists who sing of Texas and bemoan our woes, California is still the land of dreams. . . . It’s the place where Apple . . . and countless other creative companies all began.”1) That would only be relevant if Apple was leaving California, but it's not, and in fact, it's building a massive new HQ in Cupertino that will house 13,000 employees. Its current HQ fits 2,800, and Apple rents other buildings in the area housing another 6,700 employees. Oh, and the current campus isn't going away, so far more jobs are being added in California than any theoretical jobs in Texas; and
Fast forward to March: Apple announced it was building a $304 million campus in Austin with plans to hire 3,600 people to staff it, more than doubling its Texas workforce.
2) those Texas jobs are still theoretical. From March 15:
Earlier this month, we told you Gov. Rick Perry announced plans to double the size of Apple’s workforce in Austin, Texas with an investment of $304 million that would add up to 3,600 jobs. Apple will receive $21 million in incentives over 10 years through the Texas Enterprise Fund as part of the deal. According several reports from KVUE News and Austin news website Statesman, Apple representatives met with Austin City Council officials today for a formal proposal.Are DeVore and Perry declaring victory before Apple even had a formal proposal? Looks that way.
As part of the deal, we also learned that City Council would offer Apple an extra $8.6 million over the 10-year period, but Apple is still apparently waiting for the City of Austin to come to a decision on whether to offer an incentive.So the deal isn't even done, and won't be done unless Austin (or Phoenix) throw tens of millions of dollars at a company sitting on nearly $100 billion in cash. Doesn't sound like a company that is roaring to go Texas because of its business climate, just one looking for the best deal.
According to Dave Porter of the Austin Chamber of Commerce (via Kxan), Apple is considering other locations like Phoenix. That report claimed the city would have to offer Apple about $75 million in incentives to complete the deal.
And it's no accident that if Apple does decide to expand in Texas, that it'll do so in Austin—the most progressive, tolerant and educated part of the state.
Back to DeVore:
While the state struggles with interminable deficits caused by years of reckless spending, the argument in Sacramento isn’t over how to reduce government; rather, it’s over how much to raise taxes and on whom [...]Yes, California faces serious budget difficulties, stemming from the economic collapse and a dysfunctional state government that allows a tiny GOP minority to block any solutions in the state legislature.
Meanwhile, lawmakers in Texas are grappling with a fiscal question of an entirely different sort: whether or not to spend some of the $6 billion set aside in the state’s rainy-day fund.
But Texas is debating that rainy day fund because it also has massive budget deficits to contend with! Indeed, the 2011 budget deficit in California was $25.4 million, less than Texas' $27 billion. Lone Star lawmakers were forced to make draconian cuts to social services and education.
At least 32,000 school employees, including 12,000 teachers, have lost their jobs, according to one estimate. More than 8,200 overcrowded elementary classrooms have more students than the limit set in state law, and schools are being marked for closure.Only a Republican would brag about devastation on that scale. Even then, the state continues to face a $4.1 billion deficit, leading to calls to plug it with the rainy day fund, as well as restore education funding from the rainy day fund, and calls from everyone else to restore their cut spending from the rainy day fund.
DeVore thinks that debate somehow reflects positively on Texas, and that it's somehow different than the deficit issues California is grappling with. It does not, and it is not.
California’s government-employee unions routinely spend tens of millions of dollars at election time to maintain their hold on power. In Texas, the government unions are weak and don’t have collective bargaining, leaving trial attorneys as the main source of funding for Lone Star Democrats.Keeping workers from organizing sure gets Republicans excited! But at least here, DeVore isn't spinning bullshit.
California’s habit of raising taxes to fund a burgeoning regulatory state isn’t without impact on its economy. Californians fork over about 10.6 percent of their income to state and local governments, above the U.S. average of 9.8 percent. Texans pay 7.9 percent. This affects the bottom line of both consumers and businesses.In Texas, the median annual salary is $47,601. In California, it's $56,418. Subtract out the tax burden, and California residents still come out well ahead on earnings. And interesting that DeVore doesn't cite business tax numbers—that's because the effective tax rate of California businesses is 4.7 percent, compared to 4.9 percent in Texas.
There's more—Texas has fewer public employees! Trial lawyers suck! California should "Drill Baby Drill" more! You get the idea.
Now there are obviously advantages and disadvantages to both states. For example, If I were a Texas partisan (I'm not) I'd talk about its cleaner air (believe it or not!), its cheaper housing (and its avoidance of a housing bubble and collapse), and how Austin is one of the coolest cities anywhere. I'd talk about Tex-Mex food and the state's dynamic diversity. But yeah, I don't think Republicans care much about (relatively) clean air, Austin or diversity. This is about Republicans trying to puff up Texas Republicans at the expense of California to score political points. In fact, conservatives have a great deal of their ideology staked out on this Texas vs California battle—and so long as they perceive Texas to be on the rise, and California on the decline, they feel ideologically vindicated.
But truth is, when it comes to driving the new economy, no state—no COUNTRY—in the world beats California, where its culture of creativity, tolerance and innovation helps create and fuel the companies that change the world—from Disney and Levis, to eBay and Twitter, to Google and Apple. That's why California entrepreneurs received $8.6 billion venture capital in 832 deals the first nine months of 2010, compared to $833 million for 104 deals in Texas. Now Texas does exceedingly well with fossil fuels and companies like Halliburton, but those are exploitative industries, not innovative ones, and there's simply no place for innovation like California.
For Republicans eager to paint California as anti-business, the reality doesn't come close to matching their rhetoric. There is more to providing a positive business environment than the wholesale elimination of regulations and worker rights, and California—and other liberal business powerhouses like New York, Massachusetts, Illinois and Washington state—prove it.