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Gov. Perry woos tax-weary Californians

Gov. Perry woos tax-weary Californians

SACRAMENTO — Bob Lanier, a Texas-drawled Democrat who was Houston’s mayor throughout most of the 1990s, told a meeting I attended a few years ago that he fled his blue-collar hometown for Houston because it is an “open city” – a place where anyone from any background could succeed (or fail) based on his own merits.

I haven’t been to Houston for ages, but I’ve known more than a few people who have fled California’s pristine scenery for the swampland and dusty plains of Texas. They didn’t leave for the landscape or the fresh air, but for the kind of economic opportunities that Lanier was talking about.

California’s leaders often mock Texas and its Republican Gov. Rick Perry, who has been on an almost evangelical mission to lure California businesses eastward. Earlier this month, Perry visited Los Angeles, Orange County and the San Jose area. He’s been in TV ads pitching Texas to businesses and has boasted that in the last two years California companies created 14,000 jobs in the Lone Star State.

People will argue about the numbers. But the Texas-v.-California rivalry grabs attention because it is shorthand for the approaches adopted by the two major political parties, with Democrats controlling Sacramento and Republicans controlling Austin.

There’s little dispute over the basics. A new survey by WalletHub confirms what myriad surveys have shown. California has one of the highest overall tax burdens in the nation. It imposes a 36 percent higher tax burden than the national average, with only New York imposing a higher burden.

Texas isn’t the lowest-tax state, but ranks No. 7, with tax rates 25 percent lower than average. Other studies suggest that Texas has a less-oppressive regulatory burden and a lower cost of living than California. There’s no question that some high-profile California businesses have headed to Texas.

Beyond that, the debate gets murky. California officials have been boasting about their state’s newly filled general-fund coffers. California not only is “back,” they say, but its environmental, budget, and regulatory approach should be a model for the nation. They point to researchers who argue that the number of jobs going to Texas is fairly insignificant.

The back and forth over the merits of the two states seems to miss the bigger picture – that people uproot their families and businesses not because of some data point, but because of a sense of where they have the most opportunity.

“The two states that lost more wealth per capita were New York and California in the last decade,” Gov. Perry told me in an interview Friday. “There is a direct correlation between why people who have acquired wealth are leaving those states — because they feel like they are not appreciated.”

The result? Instead of pointing to job and relocation numbers, Perry pointed to a Texas-sized explosion of music and the arts. One well known urban-policy pundit, Richard Florida, argues that the main way for cities to lure jobs is not with low taxation, but with upscale cultural amenities that lure the “creative class.” But Perry ticked off a list of new privately funded museums, cultural centers, symphony halls and other cultural advancements.

“In Houston, Texas, tonight there are more theater seats available than any other city in America outside of New York City,” he added. “That happened in a decade and … it happened because we allowed Texans to keep more of their money.”

“California has just extraordinary attributes,” he added. He didn’t want to quibble over statistics, but said: “The trajectory that Texas is on versus the descent that California is on is what should cause people to step back and go wait a minute, what is happening here and why is it happening?” He blamed California’s over-taxing and over-regulating. (Texas, for instance, recently surpassed California as the top exporter of tech-based goods, according to the Dallas Morning News.)

Whatever one thinks of him, Perry, again a potential GOP presidential candidate, grasps what Lanier, the Democratic former mayor of Houston, was saying. They understand that Texas-style “openness” toward opportunity can be a more powerful lure even than the unbeatable Pacific views.

Steven Greenhut is the California columnist for U-T San Diego. Write to him at steven.greenhut@utsandiego.com.

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