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Nose Under the Community Tent

By Paul Losch

About this blog: I was a "corporate brat" growing up and lived in different parts of the country, ending in Houston, Texas for high school. After attending college at UC Davis, and getting an MBA at Harvard, I embarked on a marketing career, mai...  (More)

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Uploaded: Mar 2, 2010
I grew up in Houston, Texas, as did current CA Insurance Commissioner and struggling candidate for Governor Steve Poizner.

The State of Texas had its primaries this week, and the incumbent Governor, Rck Perry, running on a very conservative platform, wiil be facing (for Texas) a liberal former mayor of Houston.

There is much I like about Texas. The climate in Houston is not among them. Texans have a great spirit, value a robust business model, have a generally good public education system, and have a sound government fiscally.

But it ain't California.

I find it ironic that Governor Perry won the nomination to return to the Governor's office in Texas by railing against Washtington, DC. Having been a resident of the state for a number of years, I understand the appeal of his message. What seems to be be missing is the fact that his predecessor up until a little over a year ago was occupying the White House.

The wheels did not fall off the wagon on Janaury 20, 2009 when Obama became President. The seeds were sown over several years prior to his election. So just what is Perry saying? IMHO, he is not saying anything, he just is tapping into the frustration of many and the Texas "bad-ass" streak that attends voters in the State.

In some ways, Texas is its own country. Many Texans certainly act like it is. I am not sure that is a healthy thing for the other 49 states.
What is it worth to you?


Posted by Walter_E_Wallis, a resident of ,
on Mar 3, 2010 at 1:36 am

Walter_E_Wallis is a registered user.

At Fort Hood for Operation Longhorn, it was said that all Texas needed was a bit cooler weather and a better class of people- the response was "the same for Hell"

Posted by Anna, a resident of ,
on Mar 3, 2010 at 3:41 am

What is it that Paul Losch has against Federalism. Why is it bad if Texas sets its own policies? I follow Texas politics too, and there was as much frustration there with the attempts of the Federal government to control the states then as there is now. It might get more attention in California now that Obama has upped the ante (He is spending 25% of GDP compared to 21% in the Bush era), but there was no less resentment of Federal government meddling then than there is now.

The Founders never envisioned as system where states are all alike. They presumed that states would have much more autonomy than they do now (and infinitely more than some apparently like Losch would like them to have.)

States are supposed to be different from one another. Losch is right that "Texas ain't California". California isn't Texas either. People in both states probably are happy about that.

The great thing about Federalism is that if you don't like the way things are being run in your state, you can move to another. Judging by the data (Tens of Thousands of Californians are voting with their feet and moving to Texas every year), Texas's way of doing things is more popular than California's even with its weather handicap.

Does Losch really think that the US would be better if all states were like California? He says he doesn't think it's healthy that people in Texas like being run differently than states like California? What's his problem with diversity?

Posted by anonymous, a resident of ,
on Mar 4, 2010 at 9:05 pm

Family members were in Texas recently to visit Rice University, a fine university in Houston. Across the street, Texas Medical Center, one of the seven wonders of the world (almost!) When I visited Houston several years ago, I had a positive experience. Wonderful people, a great city, America's 4th largest.

Posted by Walter_E_Wallis, a resident of ,
on Mar 5, 2010 at 7:40 am

Walter_E_Wallis is a registered user.

Much of the progress in Texas was made possible by the availability of affordable air conditioning. The siesta was not a sign of laziness, just an acknowledgment that manual labor in the heat of the day was difficult. By the time Obama's promised doubling of energy cost goes through, I predict a return to the siesta.

Posted by Anon, a resident of ,
on Mar 5, 2010 at 12:22 pm


I agree with you that states don't all need to be the same. It is a funny thing, though, the selective way that ultra-conservatives apply this principle.


> Obama has upped the ante (He is spending 25% of GDP compared to 21%
> in the Bush era), but there was no less resentment of Federal
> government meddling then than there is now

This is just plain silly. President Obama inherited this mess from his free-spending Republican predecessor. Look at the ratio of debt/GNP under previous administrations.

Web Link

Remind me again why nominal fiscal conservatives love deficit spending and public debt. Oh, now I remember -- because deficit spending is a public subsidy to the wealthy.

Posted by Remember Enron, a resident of ,
on Mar 5, 2010 at 5:45 pm

"At Fort Hood for Operation Longhorn, it was said that all Texas needed was a bit cooler weather and a better class of people- the response was "the same for Hell""

Couldn't have said it better myself.

Posted by Anna, a resident of ,
on Mar 5, 2010 at 6:12 pm


I think you misread my comment. I said there was no less resentment of the deficit federal spending during the Bush era than there is now. That is people worried about government overspending were just as down on Bush as Obama...at least in Texas.

While I agree with you that Republicans were free spending wastrels whose policies were hugely destructive to the national fisc, it's hard to defend Obama's handling of the deficit: even if you grant his administration a pass due to the (dubious) necessity of deficit spending to combat the recession in the current and next fiscal year, according to the CBO, he's projecting deficits averaging $1 Trillion per year for the next ten years - even when he assumes the economy will be growing again. And projected federal spending under Obama seems to plateau at about 24% - as compared to an average over the past 50 years of about 20%. Makes Bush's reckless irresponsibility look almost statesmanlike by comparison. (I.e. Both Bush and Obama are promiscuous spenders whose policies do huge damage to the future of the country. Why get into a beauty contest between two warthogs by tendentious arguments about which was the worse offender in deficits?)

But what's this got to do with Texas or Federalism, which was the real point of my comment above?

Posted by Nayeli, a resident of ,
on Mar 5, 2010 at 6:15 pm

As a former resident of Texas, I have to admit that I miss the state. I miss the MUCH lower cost of living (property, energy, goods and services), very friendly attitudes, great roads, good schools, clean environment, open space and MUCH lower taxes (and the lack of a state income tax).

Every time I think about the immense amount of taxes, fees, tolls and CRVs in California -- I can't wonder where all of the money is going. How is this state in debt when it has such a large population and collects more taxes (and fees, etc...) per capita than any other state? They collect so much but have so little to show for it.

Texas is similar in demographics (including fiscal burden with illegal immigration), industry and scope...but it isn't in almost hopeless debt. I found the following article from the LA Times quite interesting. It contrasts the states of California and Texas:

Web Link

However, I will say that I love the weather in the San Francisco Bay Area. I know that Texas has some "cool" areas (especially along the coast), but I am from the Rio Grande Valley. 85 degrees is a "cool" day in the summer there.

Our family is saving the money that we earn here in order to eventually build a home there. For about $120K, you can build a nice brick home on an acre in many suburban areas of Dallas, Austin, Houston or San Antonio. My sister just built her home for $75K (finished...on a one acre lot) in a nice suburb in the Rio Grande Valley. My parents built their home (with our help) for less than $40K...on about 2.5 acres.


Posted by Anon, a resident of ,
on Mar 5, 2010 at 6:36 pm

Anna, my apologies. I appreciate your appreciation of the history of debt/GDP.

As for Federalism -- I agree in principle that states can be economic and social laboratories where policies are demonstrated at a state level before possibly being rolled out nationwide. I think interstate mobility is so easy now, though, that certain things are longer practical today on a per-state level.

Posted by Anon, a resident of ,
on Mar 5, 2010 at 6:38 pm


There are places in California where $120K will still buy a lot of house. Unfortunately, they are all a long way from where the jobs are.

Posted by Nayeli, a resident of ,
on Mar 5, 2010 at 7:54 pm

Hi Anon...

Yes, I understand that (although the state average is much higher). I just wanted to point out that property values and property taxes are, as a whole, much lower in Texas when compared to California (when comparing similar cities and towns). My sister and her husband purchased a home in a fancy suburb of Dallas for $140K. It is a 5BR 3BR brick home with a three car garage in a gated community with great schools.

Regardless, it just seems that Texas shows much more (in terms of services, roads, schools, etc...) with a much smaller fiscal and per capita income.

Don't get me wrong: I am not trying to spit on California. I just have to question where all of the money that California collects is going. In fact, I noticed that my taxes (federal and state) actually went up there year...although my income is still the same. I just can't help but wonder where it is all going.

Posted by You Can Take Texas and..., a resident of ,
on Mar 5, 2010 at 10:43 pm

If Texas was really all that great, how come no one moves from elsewhere to there...but everyone moves from elsewhere to Cally?

Posted by Anon, a resident of ,
on Mar 6, 2010 at 8:51 am

"You Can Take Texas" - actually, the hill country north/west of San Antonio is pretty nice. Unfortunately, historically, all the jobs were in Houston/Dallas, but, the climate in the hills around Utopia, Fredericksburg, and Kerrvile, for example, is pretty nice. Fredericksburg used to have an old fashioned small-town downtown. Anybody been there lately?

Posted by Nayeli, a resident of ,
on Mar 6, 2010 at 2:09 pm

Hi "You Can Take Texas and..."

Actually, the population of Texas has been increasing quite a bit. In fact, Texas is expected to pick up four additional Congressional districts and Electoral College votes following the Census...and California will probably lose one or two. The population of Texas has been growing that much faster than California!

This is not confined to Texas. Other states with lower taxes and cost of living are actually poised to pick up more congressional seats and Electoral votes. The states that are losing population (or those that are not growing as quickly) are typically those that have higher taxes and cost of living.

This will have a profound impact on national elections. The states who have dramatically increasing populations tend to be RED states (or "swing" states) whereas all of the states that will be losing electoral votes and congressional districts are BLUE states.

Using the likely Census data and applying it to the last Presidential election, McCain would have netted a gain of nine Electoral College votes...and Presidential Obama would have lost nine. Since the election wasn't that close (Obama won 52.5% of the vote and 365 of the 270 electoral votes necessary to win the election), it wouldn't have affected the outcome. However, it would have a profound impact on election strategy for "close" elections like 2000 or 2004. For instance, Bush would have won 282 Electoral College votes instead of the 271 that he won in 2000 (and Gore would have netted 255 instead of 266).

Most strategists on both sides of the aisle seem to believe that the next presidential election will be much closer than the previous historic election. A swing of 11-14 votes could have a huge impact.

So, yes, people ARE moving to Texas. There is a reason that they are moving...and it probably has little to do with the weather.

Posted by Nayeli, a resident of ,
on Mar 6, 2010 at 2:23 pm

Hi Anon...

Yes, I have been to Fredericksburg. It is a fantastically beautiful small town in the Texas hill country! As a teenager, I attended a summer camp in nearby Kerrville.

There are plenty of towns like these throughout the state...and some within an easy commute of major urban areas. My sister lives in a beautiful rural town called "Castroville" that is just ten miles west of San Antonio.

LOL -- I sound like a commercial for Texas Department of Tourism.

Posted by You Can Take Texas and..., a resident of ,
on Mar 6, 2010 at 6:34 pm

"So, yes, people ARE moving to Texas."

I'm talking about legals, not illegals.

Posted by Anna, a resident of ,
on Mar 6, 2010 at 7:25 pm

Unfortunately - for California - the people moving to Texas from California tend to be young middle class and upper middle class professionals who see Texas as a better place to have a career and family than California. In fact, California's net migration of US Citizens has been negative for the past several years. (Immigration - legal and illegal - plus births account for all of the population growth in California.)

In 2007, 681,000 more people moved out of California to other states than moved in. In Texas, 430,000 more people moved in than moved out to other states.Web Link
It's not a good harbinger of the future that many of the most productive (potentially taxpaying) citizens no longer see California as a viable option.

See also: Web Link and Web Link

Posted by Outside Observer, a resident of ,
on Mar 6, 2010 at 7:39 pm

When I moved to California in 1960, it had the best schools and infrastructure in the country.

Now it has the worst.

Why in the world any bright young professional would want to stay here is beyond me.

Posted by Jane, a resident of ,
on Mar 6, 2010 at 8:09 pm

California is now part of Mexico, like it or not. It is now the yellow man's burden to administer the rest of us. The Asians will probably make us all better, if we don't throw a hissy fit. If we don't adhere to the Asian work ethic, we are going to explode in a civil war of resentment.

The post-WWII heyday is over.

Posted by Nayeli, a resident of ,
on Mar 6, 2010 at 9:00 pm

Hi again, "You Can Take Texas and..."

California and Texas both deal with illegal immigration. Despite many false stereotypes about the state, Texas has a highly educated work force and growing technology sector. As someone else pointed out, many of the recent "immigrants" to Texas are actually coming from states like California.

This is also true of businesses too. California has a reputation of NOT being very business-friendly. Whereas Toyota's NUMMI plant has been in the works to close down over the past few years, the car company recently OPENED a plant in San Antonio. This is done because of tax incentives offered to companies that create jobs in the state. As a result of this effort, the unemployment rate of Texas (8.2% and holding) is not nearly as high as it is in California (12.4% and still rising).

Texas has some of the lowest taxes in the nation. There is no state income tax or grocery tax. Property taxes are low as well. The state sales tax is steady at 8.25% -- which is 12.5% lower than California. In fact, there are two "tax holidays" during the year in which Texas suspends sales tax on many items (especially education and office related). There are few road or bridge tolls...and none are permitted on public roads or bridges that have already been paid for by state funding. There are no CRVs on bottles or cans...but you can still sell those recyclables back for about the same rate as in California. The cost of most household goods (including food) is lower in Texas...which results in less sales tax income. Texas has some of the lowest gas prices in the nation (due to a low consumer gas tax) which also results in lower energy taxes.

Yet interestingly, Texas ranks near the top of US states in terms of the effectiveness of social welfare programs...and in terms of public school effectiveness. The state does not just throw money at problems. California certainly spends much more money per capita on social programs, services, schools and prisons than states like Texas. However, it seems that states like Texas tend to use that money more effectively.

This was covered in the article from the LA Times that I linked earlier. If you can, "You Can Take Texas and...", you might want to read the article.

Web Link

Don't get me wrong: I am not trying to compare apples to oranges. However, I do suggest that California can learn quite a bit from Texas. Whereas the economy in Texas is comfortably lean during this "great recession," the economic situation in California is bleak. Our state is $20+ Billion in debt...and this deficit is poised to grow larger. Yet, at the same time, some of our state politicians actually want to spend more.

I suppose that the great difference is as follows:

When the budget of Texas tightens, the State's politicians decide to stop spending so much. When the budget of California tightens (or is in a huge deficit), the State's politicians hope to raise taxes. Of course, some politicians want to raise taxes AND increase government spending.

Posted by Anna, a resident of ,
on Mar 7, 2010 at 4:48 pm

Here's some more on the Texas/California comparison. Published today.

Web Link

Posted by Outside Observer, a resident of ,
on Mar 7, 2010 at 7:36 pm

Texas has always been on my short list for retirement.

How they resolve the illegal immigrant issue will be the deciding factor.

Posted by Nayeli, a resident of ,
on Mar 8, 2010 at 4:20 pm

Hi Anna and Outside Observer...

Here is another link about how Texas is faring much better than most other states during and after the recession:

Web Link

The same research upon which this article was based pointed out that property values in Texas have never been improperly inflated by local property value/tax assessors in order to fatten its coffers. California property values skyrocketed. Why? There is a strong argument that California property values have been improperly increased as a means of gaining income for schools and other purposes. Do you think that there is any truth to this?


Posted by Stop Advertising Texas!, a resident of ,
on Mar 9, 2010 at 5:27 am

Nayeli..stop advertising Texas!!! They really don't want to talk any Californians into move there, and tipping the scale into a "California" mentality!

Posted by palo alto mom, a resident of ,
on Mar 9, 2010 at 10:12 am

First of all, I have no desire to live in Texas, it's hot and humid, has huge bugs and is a pretty chauvinistic state. But they do manage their money well.

Some interesting things:

Local property tax remains local. The state gets none of it.

Texas has no state income tax.

The State does not contribute money to the cities either, instead of revenue, Texas cities can govern themselves, including raising their own revenue (aka property taxes).

The State is primarily funded through sales tax.

Posted by Nayeli, a resident of ,
on Mar 9, 2010 at 11:18 am

Hi Stop Advertising Texas!

I am not trying to talk anyone into moving to Texas. However, if things don't change in California, there might be quite a few people in a mass exodus to the state. OF course, you would have to agree to leave the perfect weather of the SF Bay Area (and botox-produced faces) for a warmer summer and cooler winter climate. However, there are some fiscal ideas in Texas that might be worth considering here in CA.

I read Sam Walton's autobiography a few years ago. He mentioned that his inspiration for Walmart was to take something that was working well (K-Mart)...imitate the underlying principle...but make it even better. Maybe someone can do the same in regard to Texas?

California has some GREAT attributes. The state is beautiful and diverse. However, it is no longer the "trend setter" that is advertised in all of those Chevron commercials. Most Americans look at California as a state with broken (or even failed) fiscal policies. Even during this troubled economic situation, some of our State lawmakers are determined to continue spending as much (or even more). We collect more taxes than any other state (even per capita), but we have so little to show for it.

It might hurt California pride just a bit, but there are some governing principles in Texas that might benefit this state immensely. The State of Texas has a lower sales tax rate, no grocery taxes, no CRVs, no tolls on roads or bridges that are already paid for, no State income tax, and low property tax rates. However, it is able to build great schools, fantastic roads while still dispensing comparable services. Public colleges and universities are highly affordable in TX -- approximately 1/4 of the cost of comparable CA schools. Obviously, the State must be doing something right.

Anyway, forgive me if I sound like a commercial for Texas. There are just some things that I really miss about Texas. I suppose that the greatest thing that we miss are the friendly people...wide open spaces....the fact that we had more money in our pockets...and that the money could actually go further. Of course, we came here because of Stanford...and chose Stanford over the likes of Rice, Baylor and UT. But, if Stanford was in Austin... ;-)

Posted by palo alto mom, a resident of ,
on Mar 9, 2010 at 12:38 pm

There are some great things about Texas, the friendly people being #1.

I wonder if we treated our revenue the same way as Texas, imagine if we got to keep all of our property tax in Palo Alto and the state had to figure out how to survive on sales tax alone.

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