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Which is Better: California or Texas? What the Numbers Say

| February 7, 2013
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First, let’s put aside all talk of ten gallon hats vs. tie-dyed T-shirts, of  Tex-Mex chili vs. California rolls. There’s just no accounting for taste.

And Texas Gov. Rick Perry, probably won’t make his pitch to California businesses on the basis of food, fashion or music when he visits next week in hopes of luring businesses and rich people from the Golden State to the Lone Star State.

But the differences between the two states go beyond matters of personal preference. Just about everyone would like to pay lower taxes, send their kids to schools with high test scores, be able to afford a house and health care, breathe clean air and feel safe from crime.

In fact, in a radio commercial that ran in California last week, Perry touted Texas’ “low taxes, sensible regulations and fair legal system.”

California Gov. Jerry Brown dismissed the campaign as “barely a fart,” according to the Sacramento Bee.

But the newspaper went on to report that more Californians move to Texas than go the other direction — about 21,000 more in 2011.

So for all the business owners and millionaires among our readers who might be on the verge of joining that migration, we thought we’d offer a quick statistical comparison.

Taxes

Less taxation is Perry’s central claim for Texas, and according to the Tax Foundation, the figures bear out his argument. The foundation says that Californians paid an average of $4,935 in state and local taxes in 2010, while Texans paid $3,205.

Dividing total taxes by total income for the whole state, the foundation found that California had the fourth highest “tax burden” in the country, at 11.2 percent while Texas came in 45th with 7.9 percent. If anything the scale is likely to have tipped more in Texas’ favor since the passage of Proposition 30 last year increased taxes in California.

Flag of Texas (Wikimedia Commons)

Flag of Texas (Wikimedia Commons)

Income

Of course, if you make more money, higher taxes might not bother you so much. Californians had a per capita income of $43,919, while Texans made $39,536, using the foundation’s figures.  After paying our higher taxes, Californians were left with $38,984 while Texans had $36,331.  (These per capita income figures differ from those of the U.S. Census Bureau, but the general ratio is the same.)

Which state looks better by income may depend on whether you’re an employer or an employee. Perry, of course, is more interested in the perspective of employers who might like the opportunity of hiring cheap labor.

Employment

It might be harder to find employees in Texas, though. Unemployment there is 6.1 percent, compared to 9.8 percent in California, according to the Bureau of Labor Statistics.

Education

Flag of California (Wikimedia Commons)

Flag of California (Wikimedia Commons)

The quality of the employee matters as well as the availability. In California, according to the National Center for Education Statistics, 23 percent of eighth graders scored at or above proficient in math on the National Assessment of Education Progress, compared to 36 percent of Texas eighth graders. For reading, 21 percent of California eighth-graders were at or above proficient compared to 28 percent of Texas eighth graders.

On the other hand, Californian colleges and universities awarded 12 degrees or certificates for every thousand people in 2009-2010 and 2010-2011, compared to 9 degrees or certificates per thousand in Texas.

Housing

There’s no point relocating to another state if your employees can’t find a place to live. According to Trulia.com, the median sales price of a home in California is $452,000, compared to only $144,900 in Texas.

Health

Your employees won’t do you any good if they’re too sick to come to work. It’s hard to come up with an overall statistic for health, but life expectancy at birth might be the closest proxy. The figure is 80.4 years in California and 78.3 years in Texas, according to the Kaiser Family Foundation. Healthcare coverage is slightly better in California as well. In Texas, 24 percent of the people are uninsured, compared to 20 percent in California.

Environment

The environment plays a role in attracting good employees and keeping them healthy. Forbes in 2007 ranked California as the 14th greenest state in the nation, and gave Texas a rank of 34. The publication based its ranking on such factors as energy consumption and pollution.

Crime

You’ll want your business safe from crime in its new location. The Census Bureau reported 473.4 violent crimes and 2,728.2 property crimes per 100,000 people in California, compared to 491.4 violent crimes and 4,017.2 property crimes in Texas for the year 2009.

What Else?

We could go on, but everyone has different reasons for choosing where to live or locate a business. What factors would you consider in making a move?

 

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Category: Economy

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