Well, well, well. For years now we’ve been hearing that California’s budget problems exist because we “overspend.” Others claim it’s because our taxes are so high that companies and jobs move to low-tax states. Texas is often held out by those making these claims as an example of what California should emulate – a low-tax, low-services, low-spending state that supposedly has government figured out.<\/p>\n
Except they don’t. California faces a budget deficit of about $18 billion. And how much is Texas’s budget deficit?<\/p>\n
That’s right. $18 billion<\/a>:<\/p>\n But as the state’s budget shortfall widens-to as much as $18 billion, or about 20% of the next two-year budget, according to the state legislature’s latest analysis released earlier this month-critics are complaining that Mr. Perry’s policies have left the state with little room to reduce spending.<\/p>\n “There is no way that they will be able to come up with $18 billion in cuts,” said Eva DeLuna Castro, a senior budget analyst at the Center for Public Policy Priorities, a nonprofit that advocates for low-income Texans. “They would have to shut down our prison system.”<\/p><\/blockquote>\n Suddenly Texas doesn’t look like such a great model for California. They don’t have an income tax, yet their revenues have collapsed just as California’s have. Texas spends a lot<\/strong> less per resident, with a much smaller level of public services, yet they are still facing a budget deficit about the size of our own.<\/p>\n This news should put to an end once and for all the lie that California’s budget deficit stems from overspending, or that we should cut our income taxes to “stabilize” revenues, or that we should follow Texas’s model of low services.<\/p>\n Instead what Texas shows us is that the real problem – as in Greece<\/a> – is that taxes are too low, especially on the higher end of the income bracket. Higher taxes help balance the budget, sustain the services we need to attract and retain companies.<\/p>\n Think that last part is nonsense? Just ask two California companies that are moving to Colorado<\/a>:<\/p>\n As for quality of life, “there’s less traffic, less stress, the people are more grounded here. My kids aren’t going to school where all the kids drive Porsches and Mercedes,” he said. “I should have moved sooner.”…<\/p>\n One final thought from Hansen: “It’s not that we hated Orange County … We love it. But here we’re not spending our time sitting on a freeway. There are trails right by our office.”<\/p><\/blockquote>\n The OC Register article wants to make it sound like Colorado’s lower taxes were the key driver. But it sure doesn’t sound that way from the quotes. Traffic is a truly massive economic problem here in California, causing lost time and lost money. Had these business owners not had to deal with traffic, because we’d spent our money building alternatives, they may well have decided to stay, since they clearly enjoyed life in the OC.<\/p>\n Most decisions made by companies about where to locate their businesses don’t revolve around taxes. Cost of living, ability to recruit and retain skilled employees, quality of local schools, infrastructure, and other similar issues tend to dominate the list. Since California has systematically starved those services of revenue, it’s becoming harder to create the jobs that will produce recovery.<\/p>\n What we’re seeing is the “Texas is better” model proven to be the lie that it is. California should look to the model of Pat Brown, who understood that investment in our state’s services, schools and infrastructure produced prosperity, for the way out of our budget and economic crisis.<\/p>\n","protected":false},"excerpt":{"rendered":" Well, well, well. For years now we’ve been hearing that California’s budget problems exist because we “overspend.” Others claim it’s because our taxes are so high that companies and jobs move to low-tax states. Texas is often held out by those making these claims as an example of what California should emulate – a low-tax, low-services, low-spending state that supposedly has government figured out.<\/p>\n Except they don’t. California faces a budget deficit of about $18 billion. And how much is Texas’s budget deficit?<\/p>\n That’s right. $18 billion<\/a>:<\/p>\n But as the state’s budget shortfall widens-to as much as $18 billion, or about 20% of the next two-year budget, according to the state legislature’s latest analysis released earlier this month-critics are complaining that Mr. Perry’s policies have left the state with little room to reduce spending.<\/p>\n “There is no way that they will be able to come up with $18 billion in cuts,” said Eva DeLuna Castro, a senior budget analyst at the Center for Public Policy Priorities, a nonprofit that advocates for low-income Texans. “They would have to shut down our prison system.”<\/p><\/blockquote>\n Suddenly Texas doesn’t look like such a great model for California. They don’t have an income tax, yet their revenues have collapsed just as California’s have. Texas spends a lot<\/strong> less per resident, with a much smaller level of public services, yet they are still facing a budget deficit about the size of our own.<\/p>\n This news should put to an end once and for all the lie that California’s budget deficit stems from overspending, or that we should cut our income taxes to “stabilize” revenues, or that we should follow Texas’s model of low services.<\/p>\n Instead what Texas shows us is that the real problem – as in Greece<\/a> – is that taxes are too low, especially on the higher end of the income bracket. Higher taxes help balance the budget, sustain the services we need to attract and retain companies.<\/p>\n