California vs. Texas may be the biggest rivalry outside of UNC vs. Duke.
It is not a rivalry in the sports world, but a rivalry in the economic ring; And California has been getting its clock cleaned by the cowboys of the Lone Star State. Texas has claimed the top spot in nearly every single economic ranking since 2007. In the same time span, California has been ranked on the opposite side of those same lists. The Golden State has ranked dead last in nearly every single economic list.
So it is easy to say that the luster of California is surly wearing off and the star of Texas is shining as bright as ever. That is Texas Gov. Rick Perry's message as he is trying to woo California businesses that are fed up with the state's rigid tax structure to take a look at the low tax haven that is Texas. Perry launched a week long ad campaign in major California cities on February 4 in an attempt to encourage the likes of Facebook, Apple, and Google to relocate or expand their business to the Lone Star State.
It is a policy that has worked in Texas favor for the past five years. Facebook has a regional office in Austin. Apple is expanding its customer service operations to the Austin area as well. Waste Management, the trash collecting giant who began life in Sacramento, picked up and moved its headquarters to The Woodlands, a Texas sized suburb north of Houston. The major theme of these iconic California companies choosing to expand in Texas was that the cost of doing business in the Golden State is too high.
When you look closely at Texas good economic fortunes of late, it is clear to the naked eye that the "Texas economic miracle" has come at the expense of California's nightmare. But it seems that California is getting its act together, and this has Perry and the Texas Legislature very nervous.
Perry's Democratic counterpart, Jerry Brown, somehow manage to balance California's budget, the first time that has happened since the late 90's. California's unemployment rate is dropping and the graduation rate is improving. Brown is working with Republican counterparts and the state Chamber if Commerce to streamline the tax code. This is the news that Perry and his Texas counterparts do not want to hear because Texas economic future hinges on California staying anti-business.
Imagine if California, already blessed with beautiful topography and dynamic cities, had Texas low cost tax structure. All of the California transplants who moved to Texas for better economic glory would move back to the Golden State in a heartbeat. For all of the wonderful things Texas is blessed with, it looks and feels like a place to go and make money. California looks and feels like a place to live.
The moral of this story is that Rick Perry's bragging of Texas great economic situation is mostly the result of California's economic malaise. But if the Legislature in Sacramento can lower and streamline the tax burden, it will give its counterparts in Austin a run for its money.
Rick Perry's slogan to California businesses is: "Come check out Texas". What he is saying in private is: "Please stay dysfunctional California". Because as Perry secretly knows; A healthy California will be an economic nightmare for Texas.