Thursday, November 5, 2009

Hey, Texas... if you secede, you won't have California to kick around anymore

This past spring we blogged on cities that were respectively the best and worst for jobs and how they mirrored the basic fiscal stability of the state in which they resided. L.A. Times article here takes the two states whose cities were over-represented for both the good and the bad and does the whole tale of the tape breakdown.

Texas vs. California.

Who ya got?

In America's federal system, some states, such as California, offer residents a "package deal" that bundles numerous and ambitious public benefits with the high taxes needed to pay for them. Other states, such as Texas, offer packages combining modest benefits and low taxes. These alternatives, of course, define the basic argument between liberals and conservatives over what it means to get the size and scope of government right.

It's not surprising, then, that there's an intense debate over which model is more admirable and sustainable. What is surprising is the growing evidence that the low-benefit/low-tax package not only succeeds on its own terms but also according to the criteria used to defend its opposite. In other words, the superior public goods that supposedly justify the high taxes just aren't being delivered.

California and Texas are not perfect representatives of the alternative deals, but they come close. Overall, the Census Bureau's latest data show that state and local government expenditures for all purposes in 2005-06 were 46.8% higher in California than in Texas: $10,070 per person compared with $6,858. Only three states and the District of Columbia saw higher per capita government outlays than California, while those expenditures in Texas were lower than in all but seven states. California ranked 10th in overall taxes levied by state and local governments, on a per capita basis, while Texas, one of only seven states with no individual income tax, was 38th.

This article is just so doggone chock full o’ goodies, we encourage everyone to read it in its entirety.

According to a report issued earlier this year by the consulting firm McKinsey & Co., Texas students "are, on average, one to two years of learning ahead of California students of the same age," even though per-pupil expenditures on public school students are 12% higher in California.

We just had to sneak that last one in there in case you didn’t follow our advice.

H/T: W.C. Varones

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