We’re pleased to bring you this commentary on the Texas economic record from Bill Peacock, Vice President for Research at the Texas Public Policy Foundation.
Texas has been the home of the last two Republican presidents. With Governor Rick Perry now in the fray, we’re fixin’ to find out if Texas can make it three in a row.
When examining what makes Texas the benchmark conservative state, the best place to start is the size of its government. Back in 1987, total state and local expenditures in Texas were about 18 percent of private gross domestic product (GDP), versus a national average of just over 19 percent. In 2008, Texas was still at about 18 percent, while the national average had risen to over 22 percent. Spending in California, our biggest competitor, grew during that period from about 19 percent to more than 25 percent of private GDP.
Stats about where Texas ranks in taxes and spending tell the same story. The Tax Foundation says that Texas ranks 45th in state and local tax burden. StateHealthFacts.org ranks Texas 47th in total state spending. And the latest data from the U.S. Census Bureau has Texas 42nd in education spending.
Of course, these figures are used by liberals to pillory some state officials — including Governor Perry — as uncaring. Texas conservatives, though, are quick to point out the connection between low spending and taxes and what Texas is providing Americans that no other state in the country can match: jobs.
Texas is the country’s leading job creator and has been for more than a decade. Between June 2006 and June 2011, the Bureau of Labor Statistics reports that Texas added 537,500 non-farm jobs — almost more than 10 times that of the next state, Louisiana.
Additionally, five Texas cities are in the top six nationally of newgeography.com’s 2011 Best Cities for Job Growth. Ten Texas cities are in the top 20, and only one falls outside the top half of the rankings.
At a time of anemic economic growth nationally, Texas is keeping Americans employed.
Texas’ job creation performance over the last decade is truly amazing and would have surely gathered much more prominence were it not so inconvenient to the proponents of big government.
In fact, our economic record has become such an inconvenient truth that people try almost anything to undermine it. One critic tried this approach: “Take a tech-oriented region like Greater Boston or the Bay Area, subtract out a housing collapse and add in an energy boom, and I suspect you’ve covered most of the discrepancy in performance” between Texas and other states.
Perhaps it is true that if Texas’ housing and energy markets had collapsed, our economy might look a lot like Massachusetts’ or California’s. But they didn’t. And it doesn’t.
Other critics point to Texas’ 8.2 percent unemployment rate — 26th in the country and slightly higher than New York’s — as evidence that Texas is not doing so well. But they overlook the fact that Texas’ unemployment rate stands at 8.2 percent after a net inflow of 1.78 million job seekers and their families in the last 10 years. New York, on the other hand, lost 847,000 people during the same period.
Of course, Texas still has some room for improvement. As the greenest state in the country when it comes to wind energy, we are spending billions of dollars subsidizing renewable energy. And though the Texas Legislature balanced its budget this year without new taxes, it accomplished some of that with accounting gimmicks that will have to be paid for in 2013.
Additionally, the Obama administration is doing its best to hamstring the Texas economy through air quality regulations, endangered species listings, and restrictions on oil and gas production.
Despite its opponents and blemishes, though, Texas is the one big state that has proven that free-market policies work for everybody — not just the rich. And that provides quite a platform for Texans moving out into the national stage.
Should this platform prove to be a boon for Perry, one of his first acts in office may have to be reining in his anti-trust lawyers at the Justice Department, who will be sorely tempted to investigate Texas’ recent preeminence in presidential contests. One can easily imagine their proposed remedy to dissolve Texas’ monopoly: imposing new taxes and spending to take Texas down off of its high economic horse.
Bill Peacock is the Vice President for Research and Director for the Center for Economic Freedom with the Texas Public Policy Foundation, a non-profit, free-market research institute based in Austin. He may be reached at [email protected]