Of Texas and economic growth

I recently received this chart:

As the chart clearly shows, Texas has been a job creating machine relative to the rest of America in recent years. Two policies, the lack of a personal income tax (Texas is one of five states without one) and the existence of Right to Work laws which forbids forced unionization, undoubtedly have driven this growth and New Mexico must consider adopting both policies to be competitive.

Of course, no state is perfect and Texas is no exception. The state is facing a budget shortfall of up to $27 billion. And, while tough decisions must be made, it would seem that NOT spending $250 million to subsidize Formula 1 Racing in the state would be one of them.

So, Texas is to be applauded. I’m sure that the budget deficit will be closed without killing the state’s economy. What New Mexicans need to ask themselves is whether they want the Land of Enchantment to be a jobs magnet or not?

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7 Replies to “Of Texas and economic growth”

  1. So Texas’ economic growth is due to a lack of an income tax and being a right to work state. Hmm. Nevada and Florida also meet that same criteria and both of them are in the dumps. I would say its “other” factors.

    According to Texas Area Development its: A well founded, diversified economy — underpinned by low taxes, a reasonable regulatory framework, targeted government incentives and funding, and a skilled and educated work force. It includes economic development investment funds: Texas Enterprise Fund (TEF) and the Texas Emerging Technology Fund (TETF). Geographic factors – import/export ports with Mexico and deep water ports. A positive business climate consistently ranking in the top ten nationally.

    1. Mark R—-Sounds like things to emulate. The other two are an added bonus. But we have better weather 🙂

    2. I’d say that Florida and Nevada are “down in the dumps” because of their own success. They fell victims to the housing boom (created by the Federal Reserve). People flocked to those areas of the country and purchased vacation homes and really over-built the respective states. It will take some time for the effects of the housing crisis to work themselves out, but I’m confident that Florida and Nevada will work it out.

      1. Texas did not fall victim to the housing bust because of regulatory restrictions regarding mortgages. Texas does not allow prepayment penalties, restricts balloon and interest only mortgages and limits cash-out refinancing.

        1. I’m not familiar with those, but would be interested in any data showing that they had a positive impact.

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