We found the recent Economist article, California vs Texas: America’s Future a positive contribution to the debate on Best and Worst States.
The article points out the marked differences between states and helpsmake the case that the lower tax, less government intrusion model of Texas is winning over California. This is a case we have long advocated. The Economist also notes the work that this writer has developed overthe last 5 years on Chief Executive’s Best and Worst States for Business. (Texas is #1 and California is #50 according to CEOs.)
We also would like to make note of a recent blog written by Kurt Brouer titled California or Texas: Which Model is Working Best? Kurt’s Fundmasteryblog.com is getting it right by making the low tax, more personal freedom case.
With all 50 state governments under severe fiscal pressure, it is only a matter of time that the next phase of recovery will be focused on growth. You can not spend your way out of a problem. The severity of this budget crisis may lead finally to a rethinking of attitudes towards business. My list of states that need major rethinking would start with the 10 most broke states. They are:
1. California: $53.7 billion shortfall or 58 percent of its budget
2. Arizona: $4 billion shortfall or 41 percent of its budget
3. Nevada: $1.2 billion or 38 percent of its budget
4. Illinois: $9.2 billion or 33 percent of its budget
5. New York: $17.9 billion or 32 percent of its budget
6. Alaska: $1.35 billion shortfall or 30 percent of its budget
7. New Jersey: $8.8 billion or 30 percent of its budget
8. Oregon: $4.2 billion or 29 percent of its budget
9. Vermont: $278 million or 25 percent of its budget
10. Washington: $3.6 billion or 23 percent of its budget
10. Connecticut: $4.1 billion or 23 percent of its budget
Source: ABC News
The Top Ten Broke States tend to have the most taxation and most are run by liberal oriented governments.
All 50 states will be politically pressured to increase opportunities and jobs for their populations in the coming years. Being attractive to business will be the obvious choice. The wonders of our American system are our many state laboratories. High Tax States, Low Tax States, Business Friendly States and Business Unfriendly States. Those states early to adopt policies that encourage business will recover and grow faster than those who are slow. We are glad to see more publications like The Economist contributing to the debate. Hopefully we will start to see more low tax, business friendly policy changes in our many laboratories get enacted.