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Lone Star State isn’t that lonely thanks to growth

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POSTED April 30, 2014 12:31 a.m.

Texas just poached another 3,000 California jobs.

Toyota is shifting the bulk of their United States headquarters jobs to Plano, Texas.

Before you start singing the Greek chorus of doom of how high taxes and over-regulation are killing California jobs, consider this: Low tax, lightly regulated Texas is struggling with too much growth in the form of massive traffic congestion, air pollution, deteriorating roads, and shrinking water supplies.

And while there is little doubt California’s business regulations need to go from straight jacket mode to something more responsible, Texas isn’t the Promised Land unless you’re wolves on Wall Street who want to squeeze 40 percent profits out of everything you do at the public’s expense.

Roads are one case in point. Instead of taxing the oil companies for the wear and tear they are putting on county roads throughout much of Texas where oil drilling is taking place, the state last year unpaved 83 miles of roads and intends to do even more this year.

Texas is in a drought like California but their water issues are much more critical.

The Lone Star state collects 7.5 percent in local and state taxes compared to California at 11.4 percent.

For years, Texas had a right to brag about their low taxes. They had adequate infrastructure and plenty of amenities for the population. But then Texas got greedy. Politicians like Gov. Rick Perry went on job pilfering expeditions to other states, especially California. The siren song he sang was Texas has low taxes and minimal regulations on business.

Perry got bites and landed a few. But guess what? His sweet utterances didn’t pry away a lot of the firms with major visions or commitments to the community beyond generating more profit.

Texas is now blessed with a growing number of firms that don’t have to worry as much about mitigating their impact on the environment whether it is road wear from their trucks, employee traffic they generate, air quality issues or even things such as noise mitigation.

Republican presidential hopefuls like to say the low tax, low spending approach is reminisce of Ronald Reagan’s policies. If they are talking about Ronald Reagan as in governor of California, they are severely mistaken. The economic prosperity that California enjoyed during his two terms of governor was a result of his conservative leanings but not in the way it has been portrayed by the selective memory of politicians. Reagan gave California one of its biggest tax increases in history. But at the same time he pressed to slow the expansion of government and keep in check some seriously flawed spending trends. Essentially, he was an effective counter to those that sought to spend more and regulate more. California reached a middle ground it has slowly seen slip away since then.

Reagan also wasn’t “the environment be damned” conservative either. He killed the last major California water project to advance — the flooding of Round Valley — because he not only didn’t think it would be as cost effective as projected but it would have destroyed a pristine valley for questionable gain. He faced down Democrats who were pushing for it.

The point is high taxes, high spending isn’t a great model for government nor is low taxes and low spending. There is a middle ground.

Neither California or Texas is shooting for the middle.

You might argue that Texas is closer to the mark. But think about this: Is it less traumatic on the economy and business to whittle back regulations and taxes to a reasonable level or is it better to set them up for more regulation and more taxes?

Texas can’t afford to not invest substantially in infrastructure and services such as police and fire. And someone has to pay for it -— either companies, workers or a combination of both.

As for regulations, the federal government will eventually catch up with them.

The curse and blessing of California is its unique geography that includes numerous air basins hemmed in by mountains as well as ecological systems much more fragile than endless flatland that encompasses most states such as Texas. We also are still the most populated state by far which brings with it all sorts of baggage one has to deal with through the use of government whether it is taxes or regulations.

As a result, regulations imposed in California more often than not work their way east courtesy of the federal government. Dairy water discharge regulations and methane gas from cows? It’s no longer a curse of just California farmers. Just as the folks in  Wisconsin who are convinced the world is coming  to an end. Bans on  wood burning for heat in most areas? Vermont is reeling with pending regulations aimed at cleaning their dirty air.

Even the cars we drive and the gas we pump eventually make their way east. And while it is still true our regulators are moving on to the next generation of rules for engine fuel burning and gas composition, they eventually make their way to the other 47 contiguous states.

Don’t get me wrong. There is a lot to criticize about California taxes and regulations. I’d argue, though, that the growth we are embarking on in the Silicon Valley and elsewhere is home grown and driven by innovation and not a pressing desire to flee California.

Tesla may build a battery plant in Arizona or Texas with all of its wonderful environmental issues but you notice they are not moving their heart and soul out of the Bay Area. 

Jobs are very important. But so is a sustainable living environment and that includes not just taxes and reasonable regulations but being able to enjoy life.

 

 

This column is the opinion of executive editor, Dennis Wyatt, and does not necessarily represent the opinion of The Bulletin or Morris Newspaper Corp. of CA.  He can be contacted at dwyatt@mantecabulletin.com or 209.249.3519.

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