Texas is America’s future?

A libertarian economist argues Texas is a bright spot for America’s future:

Since 2000, 1 million more people have moved to Texas from other states than have left.

As an economist and a libertarian, I have become convinced that whether they know it or not, these migrants are being pushed (and pulled) by the major economic forces that are reshaping the American economy as a whole: the hollowing out of the middle class, the increased costs of living in the U.S.’s established population centers and the resulting search by many Americans for a radically cheaper way to live and do business.

To a lot of Americans, Texas feels like the future. And I would argue that more than any other state, Texas looks like the future as well — offering us a glimpse of what’s to come for the country at large in the decades ahead. America is experiencing ever greater economic inequality and the thinning of its middle class; Texas is already one of our most unequal states. America’s safety net is fraying under the weight of ballooning Social Security and Medicare costs; Texas’ safety net was built frayed. Americans are seeking out a cheaper cost of living and a less regulated climate in which to do business; Texas has that in spades. And did we mention there’s no state income tax?

There’s a bumper sticker sometimes seen around the state that proclaims, I WASN’T BORN IN TEXAS, BUT I GOT HERE AS FAST AS I COULD. As the U.S. heads toward Texas, literally and metaphorically, it’s worth understanding why we’re headed there — both to see the pitfalls ahead and to catch a glimpse of the opportunities that await us if we make the journey in an intelligent fashion.

Joel Kotkin would likely agree. A few thoughts after reading the full story:

1. There are several examples of people moving to Texas from California or the Northeast and finding that they really like Texas. But, the examples tend to emphasize Austin, a city known for plenty of cultural amenities. With its culture, UT-Austin campus, and tech companies, Austin looks like a cool place for the creative class. What about the other major areas in Texas? Why not stories about moving to Houston and Dallas, bigger cities and metropolitan areas with their own industries (oil, etc.)? How representative of Texas is Austin?

2. There is little discussion in the story about Latino residents. The primary focus in on Americans who have moved to Texas from other states but what about the influx of immigrants from Mexico? How are they doing? Are there some differences in their experiences as a whole versus those who are held up as successes in the article?

3. This is another article in a long line of opinions about which American state best represents the country or provides a glimpse into the future. What about California, a more progressive melting pot? What about the Washington D.C. metropolitan area, home to a number of the wealthiest counties in the United States? How about Illinois, held up in a more negative light in recent years for pension woes, too many governments/taxing bodies, bullish politicians, foreclosures, and violent crime? Perhaps we should look to Florida, specifically at the diversity in the Miami area or the aging population throughout the state? I realize people are interested in spotting trends but it is hard to select ideal types from 50 states and hundreds of big cities.

4. The story plays out Texas’ connections to the American pioneer and frontier story. This works but there is also a different culture and set of social norms in Texas. Even if business is thriving and people are moving in, does this necessarily mean many Americans would want to act or live like Texans? Is it all simply about a decent job and affordable housing? Yes, everyone may be American but outsiders and Texans themselves will tell you that the state is a land onto itself.

Argument for a flat tax for both electric and gas drivers

There is ongoing discussion in several states about a flat tax for electric and gas cars per mile driven:

“EV drivers want to pay their fair share,” says Jay Friedland, the legislative director of Plug-In America. “We want the roads to be supported, but we’re still in a phase of early adoption and there’s a greater public good.”

That “greater good” is to give electric vehicle technology a chance to crack through its niche status, reducing the continued reliance on fossil fuels from unstable nations. The more state and federal breaks EVs get, the greater the possibility that drivers will look to them as an alternative. But they still need to contribute to the greater good of roads and infrastructure, and Plug-In America agrees.

The advocacy group believes a flat road tax is a better solution – taxing all drivers equally, no matter how their vehicle is powered. That idea is gaining momentum.

In New Jersey, a road tax proposed by Sen. James Whelan, a Democrat from Atlantic City, would charge all drivers 0.00839 cents per mile driven. For the average driver who travels 12,000 miles per year, that comes to a little more than $100. It’s an easy way for Jersey to recoup some cash from EV drivers without targeting them directly.

It’s the same idea with Virginia’s HB 2313, which eliminates the $0.175/gallon tax on fuels in favor of a tax of 3.5 percent for gasoline and six percent for diesel fuel, while imposing larger annual registration fees and a $64 per year for EVs, hybrids and alt-fuel vehicles.

There seem to be several competing interests in these discussions:

1. States who desperately need money to pay for roads.

2. Advocates of electric vehicles who don’t want new taxes and fees to limit the adoption of electric vehicles.

3. Where are the gasoline drivers and the trucking industries? There has not been much reporting on their status in these ongoing discussions…

Another factor that makes these conversations more difficult is the potential changing nature of driving in the coming years. States need certain levels of funding for roads but it is unclear how many people will be driving what and what the status of miles driven per capita will be down the road. All of this means it is harder to make projections and also suggests that whatever is decided in the near future will probably have to be revisited soon.

Illinois Governor suggests freezing money provided to local governments from Illinois income tax

Economic times are tough so Illinois Governor Pat Quinn has floated the idea that the state limit how much income tax is shared with local governments:

Gov. Pat Quinn has proposed that the state bolster its own troubled finances by freezing the amount of state income taxes shared with local governments at 2012 levels, which could cost some towns hundreds of thousands of dollars.

Quinn estimates the plan would generate an additional $68 million for the state budget. Because income taxes are disbursed on a per capita basis, the impact to local budgets would be $5.30 per resident, according to the state.

But the Illinois Municipal League estimates the impact would be more than twice that — a $148 million payday for the state, but an $11.50-per-resident cut to local budgets…

Illinois’ income tax, enacted in 1969, was meant to be a shared venture between the state and local municipalities, said Larry Frang, executive director of the Illinois Municipal League. Both the state and local governments alike felt the effects of any dips or spikes in revenue, he said.

This is not a huge surprise given the issues of tax revenue facing various levels of government. To some degree, local governments should get used to this. Plus, if local government is at least partly about local control, then how much do some communities want to rely on money from higher levels of government anyway? On the other hand, raising property taxes and introducing new fees is not attractive to local governments.

Thinking more broadly about the connections between local and state government, does these ongoing economic issues suggest the relationships between the two bodies are more fragile than we might think? When times are good, this probably doesn’t come up much. What recourse do communities, or lower levels of government, have to fight back if the higher level of government, like the county, state, or federal government alter the existing relationship?

Can changes in states bring about “zero deaths” by car crash?

It may be a very difficult goal to reach but a number of states are aiming for no deaths in car crashes:

So the immediate focus is on putting an end to crashes that lead to fatalities. The roots of the program can be traced to Sweden, where 16 years ago safety officials declared that zero crash deaths is the only morally acceptable goal.The Illinois Department of Transportation adopted the goal of zero roadway fatalities in 2009 when it revised the state’s strategic highway safety plan. About 30 states have established their own programs aimed literally at driving down the death toll to zero.

A new study by the University of Minnesota evaluating the effectiveness of zero-death programs found that the states that have worked the longest promoting the four “E’s” of safety — enforcement, education, engineering and emergency medical services — have been the most successful at reducing crash fatalities.

Washington State in 2000 and Minnesota in 2003 were the first states to adopt the zero-fatality goal, the study said. Utah and Idaho also operate successful programs in which the study determined that a statistically significant fewer number of crash fatalities occurred after the zero-death initiatives were introduced.

While the research suggests pursuing this goal cuts the number of deaths, is there a point of diminishing returns or where the number is more “acceptable”? Perhaps this cause might join with other long-term wars in the US: the “war on auto deaths.” There could be some interesting work for sociologists to do here about the social construction of these goals. As the article notes, pursuing no deaths is at leaset partly a “morally acceptable goal.”

Another possible takeaway from the article which notes there has not been a death in four years on a commercial aircraft in the US: people should be more afraid of driving than flying.

States with the highest percentages of homegrown residents

The Census Bureau recently released statistics about which states have the most residents who were born in that state:

Nationally, on average, 60 percent of people are living in their native state. According to a Governing Magazine analysis, states in the interior South and Midwest tend to have a higher percentage of natives. Louisiana tops the list, with 79 percent of its population born there.

Among large metro areas, Birmingham ranks near the top: 74 percent of the metro population was born in Alabama, the 6th-highest percentage of homegrown residents among the top 50 U.S. metros…

Jim Williams, executive director of the Public Affairs Research Council of Alabama, has spent years trying to persuade governments to adopt changes to governmental practices developed in other states. Progress is difficult, he said…

There is a lot of literature in sociology and psychology establishing that a lack of contact with other groups tends to maintain stereotypes, Fording said. Conversely, contact between groups tends to overcome stereotypes.

Here is the list of the top 10 states: Louisiana, Michigan, Ohio, Pennsylvania, Wisconsin, Mississippi, Iowa, West Virginia, Kentucky, and Alabama.

It is a little difficult to look at this list and see the exact traits these states share. The regions and the cultures are similar in the South and Midwest though this doesn’t apply to Pennsylvania (maybe the western half but not so much the eastern half?) or maybe West Virginia. Other factors that may be influential:

1. Immigration rates.

2. Lack of world/global cities which tend to attract diverse groups of people.

3. Lower levels of education?

4. Density of population/more rural areas.

It would be interesting to ask residents of these states why they stay. It is one thing to stay because one likes the place versus the opportunities to move elsewhere are lacking. While Americans might romanticize small town life and talk about establishing roots, this likely varies from place to place. Certain values, such as interacting with people different from oneself or having access to cultural amenities or always being willing to move to follow job opportunities, could then trump geographic stability.

The best state to live in is North Dakota; will this change anything?

A new set of rankings suggests that North Dakota is the #1 state in which to live. Here are some of the reasons:

Lowest unemployment rate among the 50 states. North Dakota’s 3.8 percent unemployment rate is less than half the national rate.

Statewide GDP growth of 3.9 percent ranked third in the nation in 2009 behind Oklahoma and Wyoming (2010’s figures are not yet available.)

Best job growth last year. A Gallup survey reported that North Dakota businesses had the best ratio of hiring to firing among the 50 states.

Stable housing market. Across the nation, nearly 1 in 4 homeowners with a mortgage are underwater. In North Dakota, just 1 in 14 have negative equity, the fourth lowest negative-equity ratio among all the states. The state also has the third-lowest home foreclosure rate. Affordable homes are a big part of the story here; let’s just say you don’t need to overstretch to own. According to Zillow, the median home price in North Dakota is below $150,000. That’s less than three times the state’s median household income. By comparison, even after sharp post-bubble price declines, the median priced home in California is still about five times median household income.

Low violent crime rate. The incidence of violent crime per 100,000 residents in North Dakota in 2008 (latest available data) was the fourth lowest in the country and nearly 60 percent lower than the national average.

Lowest credit card default rate. According to TransUnion, North Dakotans seem to have a handle on spending within their means.

The article goes on to say that Gallup recently found North Dakota to be the 3rd happiest state in the county.

One way of thinking about this ranking is to address the typical questions about such rankings: how dependent is the ranking on what factors were considered and how they were weighted? This plagues rankings of everything from states to colleges to communities to country’s well-being.

But another way to look at this is to ask whether the ranking will have any impact in the real world. This seems akin to the issue of substantive significance: statistics or data might suggest several variables are related but this doesn’t mean that this relationship or finding makes a big difference in everyday life. If North Dakota really is #1 based on a variety of useful measures, does this mean more people will move to the state? People move for a variety of reasons: jobs, to be by family, for certain climates (warmer weather) or atmospheres (the excitement of creative class cities or more sophisticated places), for education, to escape certain issues (crime, poverty) and benefit from the advantages of certain places (schools, parks, family-friendly, kid-friendly). But would anyone ever move to North Dakota based on this ranking? Will it lead to more businesses taking a second look at locating in North Dakota rather than big cities (or their suburbs) like New York, Chicago, Los Angeles, or elsewhere?

Another possible area of impact are perceptions about the state. Will the state’s status or prestige increase due to this ranking? If the state is seen as successful by other states, they might emulate North Dakota’s policies.

Overall, if North Dakota was #1 for decades, would anything really change?

(A related issue: if people did start moving to North Dakota in large numbers, would the state be able to maintain its top rank on this list?)

Data on the growing conservatism of the American public

A number of commentators have explored recent data from Gallup regarding America’s increasing conservatism. Richard Florida takes a stab at the data here. Here are Florida’s conclusions:

Conservatism, at least at the state level, appears to be growing stronger. Ironically, this trend is most pronounced in America’s least well-off, least educated, most blue collar, most economically hard-hit states. Conservatism, more and more, is the ideology of the economically left behind.  The current economic crisis only appears to have deepened conservatism’s hold on America’s states. This trend stands in sharp contrast to the Great Depression, when America embraced FDR and the New Deal.

Liberalism, which is stronger in richer, better-educated, more-diverse, and, especially, more prosperous places, is shrinking across the board and has fallen behind conservatism even in its biggest strongholds. This obviously poses big challenges for liberals, the Obama administration, and the Democratic Party moving forward.

But the much bigger, long-term danger is economic rather than political. This ideological state of affairs advantages the policy preferences of poorer, less innovative states over wealthier, more innovative, and productive ones. American politics is increasingly disconnected from its economic engine.  And this deepening political divide has become perhaps the biggest bottleneck on the road to long-run prosperity.

Interesting thoughts. A few questions about this:

1. Is this a long-term trend or a relatively recent development that could be reversed relatively quickly?

2. How might these demographics tied to each party interact with the public image of the parties that suggests Republicans are about the wealthy and Democrats are on the side of the working class?

3. Does this suggest that the economic engines of America are primarily in Democratic areas (which I assume Florida would see as being located in central cities and the surrounding areas)? Is this the case because of particular Democratic policies or is this the result of other factors?

4. What would an analysis beyond correlations reveal? How do these different factors interact?