Lone Star Success News

The Left Coast Blues

September 11th, 2014

by Susan Combs

The Left Coast Blues—a very sad song.

Over the last ten years or so, I have been fascinated by the weird shift taking place in California, a state with so many natural blessings that it has seemed horribly unfortunate to watch its prospects dim. It is a gorgeous state with great weather, access to superb beaches, wonderful mountains and spectacular forests. Really amazing weather in so many places that it just would seem to make people happy.

But they’re not. They’re leaving. And why? Because the political weather is awful.

The reputable newsmagazine The Economist took a look at the two states in 2009, just after the recession had really begun to bite. Their cartoon showed a dejected California surfer leaving the ocean with his busted surfboard…and the Texan, complete with hat and boots, racing into the water hauling a shiny new skidoo. Surf’s up for the Texan.

California is on the west coast but to my mind it is on the Left coast – as The Economist put it – “hopelessly leftish,” and in 2009, the magazine noticed a turn of fortunes. The authors warned that a “dysfunctional government” with “intrusive regulation of business,” would strangle what was once a dynamic state economy.

Left Coast Blues

So, if you fast-forward to now, the years of beating up on businesses have taken a toll…people and jobs are leaving. Chief Executive Magazine has ranked California the Worst State for Business – ten years in a row. Texas? For the last ten years, we have been ranked the Best State for Business. People notice.

And to make matters worse, California has both a state capital gains tax AND an income tax, and its state income tax tops out at an astonishing 13.3%. This is of course on top of what Uncle Sam takes out of your wallet.

So people move.

And that makes sense. When your future dims noticeably, many people pack up their gumption and grit and head elsewhere, in this case east – to Texas. The New York Times just a few weeks ago pointed out that “over the last few decades, millions of Californians have left the Golden State for opportunities elsewhere” – with the largest number having moved to Texas. Not surprising.

The inescapable fact is that California has become unaffordable to literally millions.  Texas has not.

Home sweet home isn’t a phrase that is going to be heard much in California. And here are a couple of comparisons that I think might illustrate why. San Antonio and San Diego are comparably sized cities, but the average home price in the San Antonio area is $232,000 while in the San Diego area it’s $622,000. Corpus Christi and Riverside are comparably sized, but in the Corpus Christi area your average home runs about $240,000 while in the Riverside area you will pay a bit more –$394,000. And Austin and San Francisco are similar in size, but the San Francisco area is nearly four times more expensive than the Austin area.

The mystery to me is why the leadership and citizens in California have let this happen and why they don’t seem to want to do anything about it – it just keeps getting worse. At some point you have to face the fact you aren’t giving yourself any presents by thumping yourself over the head with a tax and regulation hammer.

In Texas, conservative economic policies have built a diversified economy and a strong business climate where you can get a job, build a business, buy a home, and create a future for your family for generations. It’s Lone Star Success and it’s a gift really, a gift that keeps on giving.

Yes, Virginia (and California), there really is a Santa Claus – with a skidoo instead of a sled – and he has packed up and moved to Texas.

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Susan Combs
Texas Comptroller of Public Accounts

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