An Austin-based right-wing think tank says Texas is outpacing California economically, and credits conservative fiscal policy for economic gains in the Lone Star State.

 

According to the report by the Texas Public Policy Foundation, Texas wins against California in a head-to-head comparison. The Golden State has a $15.2 billion-dollar deficit, while Texas boasts a surplus of $11.8 billion. Arthur Laffer, a former economic adviser to President Reagan, writes in the report that Texas is more competitive economically than California because of low taxes on businesses and capital gains, no personal income tax, a business-friendly regulatory environment, and restrained government spending.

 

But progressive critics of the report say this is correlation and not causation. The Center for Public Policy Priorities says that Texas’ gains can be traced to one factor: oil revenues. They say Texans are less well-educated with a lower median income. The California Budget Project blames that state’s economic woes not on progressive policies, but on the home foreclosure crisis, voter initiatives that have tied up tax revenues, and other factors. Another conservative organization, the Beacon Hill Institute at Suffolk University in Boston, rates the two states as roughly equal. While Texas gets props for conservative fiscal policy, the state is rapped for its high school dropout rates and large number of residents without healthcare.

 

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