Californians fed up with housing costs and taxes are fleeing state in big numbers

Californians may still love the beautiful weather and beaches, but more and more they are fed up with the high housing costs and taxes and deciding to flee to lower-cost states such as NevadaArizona and Texas.

“There’s nowhere in the United States that you can find better weather than here,” said Dave Senser, who lives on a fixed income near San Luis Obispo, California, and now plans to move to Las Vegas. “Rents here are crazy, if you can find a place, and they’re going to tax us to death. That’s what it feels like. At least in Nevada they don’t have a state income tax. And every little bit helps.”

Senser, 65, who previously lived in the east San Francisco Bay region, said housing costs and gas prices are “significantly lower in Las Vegas. The government in the state of California isn’t helping people like myself. That’s why people are running out of this state now.”

Based on the U.S. Census Bureau’s American Community Survey data, “lower income Californians are the ones who are leaving, not higher income,” said Christopher Thornberg, founding partner of research and consulting firm Beacon Economics in Los Angeles. …

Click here to read the full article from CNBC

Appeals Court Upholds Texas Ban On Sanctuary Cities

A federal appeals court Tuesday upheld the bulk of Texas’ crackdown on “sanctuary cities” in a victory for the Trump administration as part of its aggressive fight against measures seen as protecting immigrants who are in the U.S. illegally.

The ruling by a three-judge panel of the 5th U.S. Circuit Court of Appeals in New Orleans allows Texas to enforce what critics call the toughest state-level immigration measure since Arizona passed what critics called a “Show Me Your Papers” law in 2010.

The law allows police officers to ask people during routine stops whether they’re in the U.S. legally and threatens sheriffs with jail time for not cooperating with federal immigration authorities.

The ruling comes a week after the U.S. Justice Department — which had joined Texas in defending the law known as Senate Bill 4 — sued California over state laws aimed at protecting immigrants.

“Dangerous criminals shouldn’t be allowed back into our communities to possibly commit more crimes,” Republican Texas Attorney General Ken Paxton said in response to the decision. …

Click here to read the full article from CBS

Texas governor signs ban on so-called ‘sanctuary cities’

As reported by the Associated Press:

AUSTIN, Texas — Texas Gov. Greg Abbott on Sunday night signed what he calls a ban on so-called “sanctuary cities” that allows police to ask about a person’s immigration status and threatens sheriffs with jail if they don’t cooperate with federal authorities. He did so over intense opposition from immigrant-rights groups and Democrats, who say the law echoes Arizona’s immigration crackdown in 2010 that prompted national controversy and lawsuits.

Abbott, a Republican in his first term, took the unusual step of signing the bill on Facebook with no public notice in advance. He said Texas residents expect lawmakers to “keep us safe” and said similar laws have already been tested in federal court, where opponents have said the bill likely will be immediately challenged.

“Let’s face it, the reason why so many people come to America is because we are a nation of laws and Texas is doing its part to keep it that way,” Abbott said. His spokesman, John Wittman, later said they chose to sign the bill on a Facebook livestream because that’s “where most people are getting their news nowadays.”

The bill cleared a final hurdle this week in the Republican-controlled Legislature over objections from Democrats and immigrant rights supporters who’ve packed the Texas Capitol. They call it a “show-me-your-papers” measure that will be used to discriminate against Latinos. …

Click here to read the full article

 

New Overtime Rules Burden CA Small Businesses

Money

The Department of Labor’s new overtime rules come at a jarring time for California businesses which have seen recent changes in California laws to increase both the minimum wage and mandated leave. Small business employers can’t catch a breath before a new mandate comes down affecting their employees and ultimately their bottom line.

The Department of Labor’s new rule allows workers earning $47,476 annually time-an-a-half for every hour they work beyond 40 hours. The previous annual salary threshold for requiring time-an-a-half pay was $23,660.

National Federation of Independent Business California State Executive Director Tom Scott said in a release responding to the new rule, “We see this as particularly troubling here in California where the cost of doing business is already prohibitively high. Small businesses are still grappling with the news of a $15 minimum wage; now they have to go through each salary exempt position and decide which employees they have to shift to hourly workers. This will adversely affect workplace morale as many will view this adjustment as a demotion.”

However, there is a way for employees of all stripes to get a pay increase without affecting a businesses bottom line. Unfortunately, because of the increased burdens California businesses face more businesses are looking at this benefit for their employees: Move to a state with no income tax.

If an employee receives the same wage in, say, Texas or Nevada, which have no income taxes, more money stays in the employees’ pocket. It’s like a pay raise without the companies increasing payroll.

Too many California businesses are doing the math because of the constant attack on their bottom line.

Originally published by Fox and Hounds Daily

Will The Supreme Court Remake California Politics?

Photo courtesy Envios, flickr

Photo courtesy Envios, flickr

Like a bolt out of the blue the US Supreme Court has suddenly thrust front and center the most important question in a democracy: who should exercise political power.  Should it be all the people, or should it just be those citizens qualified to vote?  The Supreme Court has agreed to hear a case out of Texas that challenges the 50-year methodology of using all the people in drawing legislative districts.  The ruling could drop on California politics like a brick on a tea cup.

Beginning in 1962, the Supreme Court under Chief Justice Earl Warren handed down a series of rulings that said legislative and congressional districts must be drawn on the basis of equal populations – one person, one vote.  This did away with the old rural-based state senates, including California’s where three small counties had one senator and Los Angeles had one senator.  “Legislators represent people, not trees or acres,” said Warren in explaining why malapportioned districts were unconstitutional.

But the Supreme Court never said who the people were.  The Texas plaintiffs say representation should be limited to just the “citizen voting age population” (CVAP).  They have sued their state claiming that some districts have more voters than other districts, because in some districts almost everyone is a citizen while in others many residents are non-citizens, and thus non-voters.  This violates “one person-one vote,” plaintiffs say

So the issue will be: should districts be drawn on the basis of the voters and potential voters in a state; the over-18 citizen population; or can they be drawn as they are now on the basis of the whole population with citizens and non-citizens counted equally.

While this sounds technical and boring, it has huge political impact.  If California went from all residents in drawing its districts to just CVAP, central Los Angeles with its large non-citizen population and younger population would lose a significant number of districts; they would be shifted to the suburbs and rural California, areas with fewer children and non-citizens.

The Los Angeles State Senate district of Democratic President Pro Tem Kevin de Leon is 67 percent Latino by population, but only 52 percent Latino in CVAP.  So if it were redrawn based on CVAP, the district would need to increase in size thus pressuring neighboring Latino districts and ultimately leading to fewer Latino districts in Los Angeles as districts shifted to higher citizen population areas.

Theoretically at least, Republicans could be winners in this new scheme as their areas tend to be suburban and rural with more citizens.  Latinos and the inner cities would lose out, which is why Latino and liberal groups are already panicking over what the Court might do.  “It would devastate Latinos and Asians and the districts currently held by Latinos, Asians and African Americans in California,” said one redistricting expert.  “The question is whether the cities should enjoy the same per capita representation as their suburban and rural, whiter, older counterparts,” wrote one unhappy academic.

Unfortunately for those on the academic left, the answer might be yes.  The Warren Court rulings said we must equalize the rights of voters to elect their representatives.  But if you have some districts full of non-voters, are you not discriminating against those neighboring districts with lots of voters?

The Warren Court did not face this issue half a century ago because the census did not provide a way to count only citizens.  But now the US Census provide counts of those over and under the age of 18, and the census itself has developed a methodology to determine CVAP in census units.  Meridian Pacific has published an analysis of all the districts drawn by the Citizens Redistricting Commission in 2011 and also provides CVAP for every California district.

The Supreme Court itself seems somewhat enamored by CVAP.  In a 2009 case called Bartlett v Strickland the Court ruled five to four that in drawing minority districts a minority group must constitute a numerical majority of the voting-age population in an area.  This required the Citizens Commission to consider CVAP in drawing most of the Los Angeles districts because of the size of the minority populations, so CVAP has already been used in one instance in California.

My guess is that four of the five justices who made up the majority in that ruling voted to hear the Texas case, and that there are five justices ready to define the Warren-era “one person-one vote” standard to mean those who actually can vote: citizens over the age of 18.

If they do, California might have to completely redistrict before the 2018 election, and that would vastly increase the number of rural and suburban districts in this state.

Originally published by Fox and Hounds Daily

Texas Now Produces More Natural Gas Than All Of OPEC

Everything is bigger in Texas, especially natural gas production. The Lone Star State alone produces more natural gas than every country in the world, except Russia, and that includes every member state of OPEC.

The American Petroleum Institute has released a graphic showing that Texas produces 18.81 billion cubic feet of natural gas per day, well above any member of OPEC. The graphic is meant to show how hydraulic fracturing and horizontal drilling into shale formations has made the U.S. the world’s top oil and gas producer.

Source: The American Petroleum Institute
Source: The American Petroleum Institute

“This is what energy security looks like,” Tracee Bentley, head of the Colorado Petroleum Council, said of the graphic. “Thanks to innovations in hydraulic fracturing and horizontal drilling, Colorado now outpaces seven of 12 OPEC nations in natural gas production.”

Individual U.S. states now produce so much natural gas, they outrank whole countries when it comes to daily production. Iran, the largest OPEC gas producer, only produces 15.43 billion cubic feet of natural gas per day. Qatar, OPEC’s number two gas producer, produces 15.09 billion barrels per day.

Louisiana and Pennsylvania also rank among the world’s top 15 natural gas producers. Louisiana produces more gas major producing countries like the Netherlands and Indonesia, while Pennsylvania beats out Mexico and the United Arab Emirates.

Russia as a whole still produces more natural gas than any individual state, but the U.S. as a whole produces much more than Russia. Total U.S. natural gas production comes in at 65.73 billion cubic feet per day, compared to Russia’s 59.46 billion cubic feet per day.

“Rising domestic production has helped to reshape global markets and revitalize job creation here in the United States,” Bentley said.

API’s graphic also compares individual states against the world when it comes to oil production. On its own, Texas produces more crude oil per day than the UAE, Kuwait, Venezuela and Nigeria. As a whole, the U.S. is the world’s largest producer of oil.

Source: The American Petroleum Institute
Source: The American Petroleum Institute

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Originally published by the Daily Caller News Foundation

Tax Day hits Californians harder than most

April 15 is forever recognized by everyone as the day of the year that you settle up your “debt” with the government, if you have one. Some people have no tax liability because only 60 percent of people actually pay taxes in California. These individuals should be recognized on this day each year as the ones who are working hard for the greater societal good and the American Dream.

Yet our government would rather look at Tax Day as Christmas and California taxpayers as individual Santa Clauses with never-ending gift bags of funds for the state. California’s personal income tax system consists of 10 brackets and a top rate of 13.3 percent. That rate ranks California as the highest in the nation among states levying an individual income tax. In 2011, our average total tax burden of 11.4 percent ranked fourth highest out of 50 states, and was well above the national average of 9.8 percent. California currently ranks 48th in the Tax Foundation’s State Business Tax Climate Index when comparing the states in five areas of taxation that impact business: corporate taxes, individual income taxes, sales taxes, unemployment insurance taxes and taxes on property. California took the most taxpayer money in the country in 2013 with $108.22 billion in tax revenues, 111.4 percent higher than the similarly populated state of Texas.

One would think that our state must be the “gold standard” in services due to the high amount of taxes flowing into Sacramento. The reality is we are ranked 46th in the nation for our education system. California drivers continue to pay the highest gas taxes in the nation, and due to Assembly Bill 32, a new fee is being added to those taxes. Further, California is ranked 47th in unemployment, a failure to every resident of our state. Given such high unemployment numbers, it is not a surprise that California has the highest rate of poverty in the nation, too.

As an investment advisor, it is my job to assist my clients in making decisions that ensure their money is working for them. Isn’t it about time that we empower Californians to insist that their tax dollars do the same? When did we settle for such mediocrity? I came to Sacramento to fight for more cost-effective policies and accountability when it comes to the spending of taxpayer money. As a representative of our taxpayers, their money needs to be invested wisely. Taxpayer dollars must be thoughtfully used to invest in our children’s education, deliver an educated future workforce and to support essential services such as public safety and our judicial system. Further, these investments should be supported by policies that incentivize business creation, job growth and economic recovery.

This legislative session, I’ve authored two common-sense bills that will ensure our taxpayer dollars are working for us and our communities. One of my bills, AB799, would create a more competitive investment climate and bring more resources to California in support of our local startup companies. Given that California’s tax structure is far less competitive than other states, investors are flocking elsewhere and taking countless jobs and capital investment with them. AB799 will move California toward becoming the best state within which to launch a startup company.

I’ve also introduced AB89, which will help local schools provide better resources and materials for our students inside the classroom by allowing schools to retain all of their funds without being forced to pay sales tax back to the state. Currently, our public schools, funded by our tax dollars, are subject to the state’s 7.5 percent sales tax which has created a “double tax” situation on our taxpayer dollars. By taxing public schools, the state is actually taking money out of our local classrooms. AB89 will fix this issue and ensure that more of our tax dollars make it into our classrooms.

President Ronald Reagan famously said “Status quo, you know, is Latin for ‘the mess we’re in.’” While we’re taking out our checkbooks this April 15, I think we should all take a cold, hard look at what we are paying into. Ultimately, it will take a more balanced representation of Republicans and Democrats in the Legislature to truly address our broken system. Until then, we can at least insist that our hard-earned money is being well invested while we continue to work toward returning fiscal responsibility to Sacramento.

Assemblyman Travis Allen, R-Huntington Beach, represents the 72nd Assembly District in the California Legislature.

Originally published online by the Orange County Register

Economic Contrast: Texas vs. CA

In the last decade, Texas emerged as America’s new land of opportunity — if you will, America’s America. Since the start of the recession, the Lone Star State has been responsible for the majority of employment growth in the country. Between November  2007 and November 2014, the United States gained  a net 2.1 million jobs, with 1.2 million alone in Texas.

Yet with the recent steep drop in oil prices, the Texas economy faces extreme headwinds that could even spark something of a downturn. A repeat of the 1980s oil bust isn’t likely, says Comerica Bank economist Robert Dye, but he expects much slower growth, particularly for formerly red-hot Houston, an easing of home prices and, likely, a slowdown of in-migration.

Some blue state commentators might view Texas’ prospective decline as good news. Some, like Paul Krugman, have spent years arguing that the state’s success has little to do with its much-touted business-friendly climate of light regulation and low taxes, but rather, simply mass in-migration by people seeking cheaper housingSchadenfreude is palpable in the writings of progressive journalists like the Los Angeles Times’ Michael Hiltzik, who recently crowed that falling energy prices may finally “snuff out” the detested “Texas miracle.”

Such attitudes are short-sighted. It is unlikely that the American economy can sustain a healthy rate of growth without the kind of production-based strength that has powered Texas, as well as Ohio, North Dakota and Louisiana. De-industrializing states like California or New York may enjoy asset bubbles that benefit the wealthy and generate “knowledge workers” jobs for the well-educated (nationwide, professional and business services employment rose by 196,000 from October 2007 through October 2014), but they cannot do much to provide opportunities for the majority of the population.

By their nature, industries like manufacturing, energy, and housing have been primary creators of opportunities for the middle and working classes. Up until now, energy  has been a consistent job-gainer since the recession, adding  199,000 positions from October 2007 through October 2014, says Dan Hamilton, an economist at California Lutheran University. Manufacturing has not recovered all the jobs lost in the recession, but last year it added 170,000 new positions through October. Construction, another sector that was hard-hit in the recession, grew by 213,000 jobs last year through October. The recovery of these industries has been critical to reducing unemployment and bringing the first glimmer of hope to many, particularly in the long suffering Great Lakes.

Reducing the price of gas will not change the structure of the long-stagnant economies of the coastal states; job growth rates in these places have been meager for decades. Lower oil prices may help many families pay their bills in the short run. But there’s also pain in low prices for a country that was rapidly becoming an energy superpower, largely due to the efforts of Texans.

Already the decline in the energy economy, which supports almost 1.3 million manufacturing jobs, is hurting manufacturers of steel, construction materials and drilling equipment, such as Caterpillar. Separately, the strengthening of the dollar promises harder times ahead for exporters  in the industrial sector, and greater price competition from abroad, amid weakening overseas demand. Factory activity is slowing, though key indicators like the ISM PMI are still signaling that output is expanding.

Right now in Texas, of course, the pain is mounting in the energy sector. Growth seems certain to slow in places such as Houston, which Comerica’s Dye says is “ground zero in the down-draft.” Also vulnerable will be San Antonio, the major beneficiary of the nearby Eagle Ford shale. The impacts may be worst in West Texas oil patch towns like Midland, where energy is essentially the economy.

Yet there remain reasons for optimism. Cheaper energy prices will be a boon for the petrochemical and refining industries, which are thick on the ground around Houston and other parts of the Gulf Coast. The Houston area is not seeing anything like the madcap office and housing construction that occurred during the oil boom of the 1980s. Between 1982 and 1986 the metro area added 71 million square feet of office space; including what is now being built, the area has added just 28 million square feet since 2010. Compared to the 1980s, the residential market is also relatively tight, with relatively little speculative building.

The local and state economies have also become far more diversified. Houston is now the nation’s largest export hub. The city also is home to the Texas Medical Center, often described as the world’s largest. Dallas has become a major corporate hub and Austin is developing into a serious rival to Northern California’s tech sector.

Texas needs to increase this diversification given that oil prices could remain low for quite a while, and even drop further after their recent recovery.

This is not to deny that the state is facing hard times. Energy accounts for 411,372 jobs in Texas, about 3.2% of the statewide total, according to figures from Austin economist Brian Kelsey quoted in the Austin American-Statesman. If oil and gas industry earnings in Texas fall 20%, Kelsey estimates the state could lose half of those jobs and $13.5 billion in total earnings.

Low prices also could also devastate the state budget, which is heavily reliant on energy industry revenues. A reduction in state spending could have damaging consequences in a place that has tended to prefer low taxes to investing in critical infrastructure, and is already struggling to accommodate break-neck growth. The only good news here is that slower population growth might mitigate some of the turndown in spending, if it indeed occurs.

But in my mind, the biggest asset of Texas is Texans. Having spent a great deal a time there, the contrasts with my adopted home state of California are remarkable. No businessperson I spoke to in Houston or Dallas is even remotely contemplating a move elsewhere; Houstonians often brag about how they survived the ‘80s bust, wearing those hard times as a badge of honor.

To be sure, Texans can be obnoxiously arrogant about their state, and have a peculiar talent for a kind of braggadocio that drives other Americans a bit crazy. But they are also our greatest regional asset, the one big state where America remains America, if only more so.

This piece first appeared at Forbes.

Cross-posted at New Geography and Fox and Hounds Daily

Tesla Challenges Dealership Laws in Various States — Including Texas and Arizona

California’s Tesla Motors Inc. is proving as revolutionary in selling cars as making them. It’s challenging states that mandate new cars be sold only through dealerships by pushing to offer its premium electric vehicles directly through company showrooms.

The two sides raced each other recently in a debate sponsored by the Texas Conservative Coalition Research Institute. The verbal drag-race pitted Ricardo Reyes, Tesla’s vice president of communications, against Bill Wolters, president of the Texas Automobile Dealers Association.

Each side maintained the other was upholding a monopoly. Reyes insisted the Texas law, by preventing Tesla from selling cars directly, erected a monopoly consisting of state dealers. Wolters said the opposite was true: That Tesla, by cutting out the dealers and selling cars only by itself, was monopolizing the market.

Interstate Commerce Clause

At issue was the Interstate Commerce Clause of the U.S. Constitution, which gives Congress alone the power “to regulate commerce with foreign nations, and among the several states, and with the Indian tribes.” It established a vast free-trade zone among the 50 states, a keystone of American prosperity.

The debate was reported in the Texas Tribune.

“How does a manufacturer of a product that owns every retail outlet benefit a consumer or the state of Texas?” Wolters asked.

Reyes responded, “All we’re asking to do is be allowed, unfettered, to compete.”

According to the Tribune, Reyes called his company the “underdog.”

Reyes insisted that Tesla just wants to sell directly to its customers. Currently, Tesla sells no cars in Texas, but in 2015 plans to sell 55,000 nationally and abroad, Fortune reported yesterday. That’s a fraction of total expected U.S. vehicle sales of more than 17 million, according to Automotive News.

Also yesterday, Reuters reported on the company’s financial problems, “Tesla Motors Inc missed fourth-quarter sales targets and analysts’ profit expectations, but Chief Executive Officer Elon Musk on Wednesday said by 2025 Tesla’s growth trajectory could take its market value to $700 billion, matching that of Apple Inc.

“It was a glimmer of optimism capping a difficult quarter that saw the electric-car company struggle with production and delivery issues on several fronts, notably in China.”

Although perhaps utopian, it’s that promise of Apple-like success that concerns dealers in Texas and elsewhere. Musk did not attend the debate.

Wolters addressed the replacement threat directly at the debate. “If we didn’t have franchise laws, the manufacturers, as they should, would focus on their shareholders and only have dealerships in the most profitable, highly populated areas of our state,” he said. “Do we want to jeopardize two-thirds of the dealerships in our state?”

Reyes said, “It is odd to me that the only thing consumers can’t buy direct is booze and cars in this state. Imagine the Girl Scouts having to sell through a distributor network. Imagine Apple having to sell through a distributor network.”

Prohibition

The alcohol example is interesting because it involves a quirk in the Constitution. Alcohol Prohibition, “the Noble Experiment” from 1920-32, was imposed with the 18th Amendment, which banned manufacturing or importing alcohol except for medicinal or religious purposes.

It was enforced through the Volstead Act and other federal laws.

However, when Prohibition was repealed, the 21st Amendment allowed the states to carve out their own distribution laws for alcohol. It reads, “The transportation or importation into any state, territory, or possession of the United States for delivery or use therein of intoxicating liquors, in violation of the laws thereof, is hereby prohibited.”

Note the clause, “in violation of the laws thereof” — meaning state laws.

That’s why California has very liberal alcohol laws. But in Pennsylvania, as Forbes recently reported, “If you want to buy beer, you have to go to a beer store or distributor. If you want to buy spirits, you have to go to a state-run liquor store.”

But there’s no 21st amendment for anything besides alcohol.

Foie gras

Ironically, California itself is challenging the Interstate Commerce Clause in its controversy over foie gras, insisting that a state ban on the culinary delicacy’s production and use includes banning importing it from other states and countries.

State restaurants have retorted that, although the state can ban specially fattening a goose — the way it’s made — it can’t ban importing foie gras.

As CalWatchDog.com reported, Attorney General Kamala Harris is appealing a January ruling by U.S. District Court Judge Stephen Watson that federal law preempts state law on importing foie gras.

Arizona

Texas’ action also is somewhat ironic, given its boast of having fewer regulations and a more pro-business environment than California.

Tesla is faring batter in the Grand Canyon State. Reported the Arizona Republic:

“House Bill 2216 would effectively upend the decades-old system that prohibits manufacturers from competing with dealerships through direct sales. Tesla is pushing a bill similar to one that failed a year ago in hopes that a new governor and Legislature are more open to what it sees as free-market principles.

“Standing in the way are the state’s car dealers, a group that directly employs about 24,000 Arizonans and accounts for $2 billion in sales taxes, a crucial element of the state’s revenue. They see Tesla as seeking an exception that would allow it to establish monopoly powers that threaten the state’s broader economy.”

But Tesla owners, by definition an upscale group able to purchase a $101,500 car, may have the last say. Mark Rohde told the Republic, “As a consumer, I don’t need a dealer to take care of me. I don’t need a middle man. If you believe in free-market economies, then you better get behind free-market economies.”

Originally Published on CalWatchdog.com

Is Texas the new California?

Originally published in the Orange County Register on June 24, 2011

Chart courtesy Esmael Adibi, Chapman University

Written by Brian Calle

Is Texas the new California? A bustling economy, housing at affordable levels and some of the most aggressive examples of business-friendly public policies in the country make Texas desirable not only for entrepreneurs and retirees but also right-leaning voters desperately searching for some hope for a fiscally responsible public-policy renaissance and a new face for a Republican Party that needs one.

California, once a Republican stronghold (believe it or not), helped steer national political discourse and boasted its viability as an economic leader among states. But with a mass exodus of both business and job seekers, a confining regulatory infrastructure and a high cost of living, California appears to be riding off into the sunset, economically speaking.

Today, Texas is the big state leading the pack and, based on its public policy approaches, it should. The parallels though between today’s Lone Star State and the Golden State of the 1960s, 1970s and 1980s are apparent. So much so, in fact, Texas seemingly has become the new California – that is, the economic engine of the country, the innovation capital and perhaps, its political powerhouse, too.

Comparisons of the politics, economics and public policy of California and Texas have become en vogue, and rightly so. Both states are big, iconic and yes, eccentric. California is the largest state by population in the United States; Texas is second. By area, Texas is the second largest state and California is third. (Alaska is first.) Both states have significant (and growing) Latino populations. And both states share a border with Mexico.

In some ways, both states represent the broader future, and possible directions, of the nation – demographically, politically and economically. One a blue state. One a red state. One liberal in public policy, the other conservative in political approaches. One faltering, the other thriving. While the Gold Rush has seemingly ended for California, Texas is in high growth mode. In fact, since the start of the nation’s economic recovery, more than one-third of new jobs came from Texas, according to the Federal Reserve Bank in Dallas.

Texas governor Rick Perry put it this way in a email to me: “Here in Texas, we’ve worked hard to create an economic environment that allows people to risk their capital and get a good return on their investment by focusing on keeping taxes low, maintaining a reasonable and predictable regulatory climate and fair legal system – which was further strengthened with the passage of loser pays legislation this session – and developing a skilled workforce. These principles, combined with competitive investments from the Texas Enterprise Fund and Texas Emerging Technology Fund have helped attract investment dollars and thousands of jobs to our state, and top researchers to our universities.”

As Chapman University economist Esmael Adibi recently noted, since California’s 2007 employment peak, the state has lost nearly 1.4 million payroll jobs. Meanwhile, Texas is boasting a job boom of more than 200,000 new jobs the past two years. From 2000-10, California has seen a net employment loss of 100,000 jobs whereas Texas saw a net gain of 1.4 million payroll jobs. Moreover, from 2005-09, California saw a net loss of 870,000 residents. People are leaving the state for three reasons, according to Adibi: jobs, housing prices and taxes, both state and local – all factors that play to the advantage of Texas.

California is a notoriously high-tax state, 49th in the United States in overall taxation (New York is 50th). California inflicts a flurry of taxes on residents including a state sales tax that is the second-highest in the nation and the third-highest state income tax, according to an analysis by the Tax Foundation. By comparison, Texas ranks ninth overall; it has no state income tax; and ranks 14th of 50 states for sales tax. To be fair, California scores better than Texas on property taxes because of Proposition 13, which became law in 1978, when the state was at least somewhat fiscally sane.

Even though property taxes are less-high in the Golden State, housing is not nearly as affordable as in the Lone Star State. During Chapman University’s recent economic forecast update, Adibi said that housing in Texas costs a fraction of what it does in California. The median 2009 home price in Austin was $187,400, compared with Orange County’s 2009 median home price of $477,200. “In other words, the median home price in Austin is about 60 percent cheaper than what it is in Orange County,” Adibi said in an email.

Unemployment in Texas is at 8 percent, below the national of 9 percent – while California has the second-highest rate of joblessness, 11.7 percent in May, according to the U.S. Bureau of Labor Statistics.

Regulation also plays a major role in whether a state declines or surges. California’s onerous labor standards, especially for overtime pay, are a disincentive for businesses to come to the state, or to stay and grow. For instance, California requires overtime pay after eight hours in a day; the federal law allows more flexibility, starting the overtime clock after 40 hours in a work week. Texas’ overtime laws are in line with federal standards. Texas is also a right-to-work state, meaning workers cannot be required to join a union or pay dues or fees to a union; California is not.

The cherry on top for Texas, though, is the recent passage of loser-pays legislation, which tends to curb frivolous lawsuits and will likely attract new businesses, especially in the medical field.

Even politically, California has lost ground and influence to Texas, especially within the Republican Party. In the 1960s, ’70s and ’80s California Republicans helped set the tone for national policy and political discourse. Two Republican presidents were elected (two times each) in that time frame from the Golden State – Richard Nixon and Ronald Reagan. The most recent Republican president, though, is from Texas and given recent events, perhaps the next one will be as well.

The Nixon and Reagan eras of the presidency parallel political realities today. The Watergate scandal’s impact on the Republican Party, including Nixon’s resignation, led to Jimmy Carter winning the presidency in 1976. Carter won Texas that year while Republican President Gerald Ford won California. (How times have changed.) Four years later, Reagan ousted Carter and became the 40th president, perhaps a testament to the ideological and public policy leadership from California politicos at the time.

Fast forward to more recent presidential politics: President George W. Bush’s time in the White House ended with a public seemingly fed up with the leadership of the former Texas chief executive and the broader Republican Party, perhaps not to the extent it was with Nixon, but still enough to help usher in the presidency of Barack Obama – a president, some would argue, who is in the same mold as Jimmy Carter.

Current Texas Gov. Perry appears to be weighing a presidential run. If he does decide to announce his candidacy, some, including me, believe he would become the instant front-runner. Not only because the rest of the presidential field is, well, bland, but because Texas, which Perry has governed 10 years, enacted sane economic policy and conservative approaches to government – and is thriving.

While California legislators of the past few decades should serve as examples of how not to govern, Texas is perhaps one of the best examples of how more free-market, fiscally conservative approaches to public policy work to propel economies. It is a message that needs exposure, especially now, and perhaps the best endorsement for a Perry presidential campaign.

Of course, Texas is not without its challenges nor is Perry without his questionable policy choices, but when comparing the failed policies of California, those akin to the type of big government philosophy President Obama has brought to Washington, to the taxpayer-friendly approaches deployed in Texas, the choice is clear: Texas, Texas, yeehaw!

Brian Calle is an Opinion Columnist and Editorial Writer for the Orange County Register, a Senior Fellow at the Pacific Research Institute, an Unruh Fellow at the Jesse Unruh Institute atthe University of Southern California and editor of the California Political Review. He can be contacted at bcalle@ocregister.com.