Texas vs. California: Smaller Government Wins

Michael Barone takes a look at the state governments in Texas and California and finds that, to no one's surprise, smaller government is more successful and has better overall results:

They are lessons that are particularly vivid when you contrast Texas, the nation's second most populous state, with the most populous, California. Both were once Mexican territory, secured for the United States in the 1840s. Both have grown prodigiously over the past half-century. Both have populations that today are about one-third Hispanic.

But they differ vividly in public policy and in their economic progress -- or lack of it -- over the last decade. California has gone in for big government in a big way. Democrats hold big margins in the legislature largely because affluent voters in Los Angeles and the San Francisco Bay area favor their liberal positions on cultural issues.

Those Democratic majorities have obediently done the bidding of public employee unions to the point that state government faces huge budget deficits. Gov. Arnold Schwarzenegger's attempt to reduce the power of the Democratic-union combine with referenda was defeated in 2005 when public employee unions poured $100 million -- all originally extracted from taxpayers -- into effective TV ads.

Californians have responded by leaving the state. From 2000 to 2009, the Census Bureau estimates, there has been a domestic outflow of 1,509,000 people from California -- almost as many as the number of immigrants coming in. Population growth has not been above the national average and, for the first time in history, it appears that California will gain no House seats or electoral votes from the reapportionment following the 2010 census.

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.

And Americans have been voting for Texas with their feet. From 2000 to 2009, some 848,000 people moved from other parts of the United States to Texas, about the same number as moved in from abroad. That inflow has continued in 2008-09, in which 143,000 Americans moved into Texas, more than double the number in any other state, at the same time as 98,000 were moving out of California. Texas is on the way to gain four additional House seats and electoral votes in the 2010 reapportionment.

My Texas correspondent left California when his company transferred their headquarters to the Dallas area. He had the advantage of taking his California salary with him, and he's never looked back. I don't think you could get him out of there now.

I have another friend who is considering an offer in the Houston area. Given the general state of things, I'd take it.

I've gone to Texas every January since 1999 and thoroughly enjoy it down there. Given the economic situation in California, there may be some more Californians headed that way.