When asked to name states in financial difficulty, many people would include California among the top candidates. The response “Texas” probably isn’t on the tip of the tongue for most people, a reasonable reaction given the tailwind from inmigration and above-par economic growth in Texas in recent decades.
Texas can take credit for some of its success, but the state also owes some of its good fortune to factors like a two-decade bull market in oil prices – until the last few years, anyway, when a reminder that oil prices, like housing prices, don’t always grow to the sky.
In a recent op-ed in Forbes, Chuck DeVore of the Texas Public Policy Foundation reviewed recent fiscal developments in Texas, and concluded:
“Yet as much as Texas lawmakers rightly criticize California for its big-taxing, spendthrift ways, when it comes to local government spending and property taxes, Texas has no leg to stand on. In fact, Texas local government is increasing taxes and spending at a higher pace than its rival California.”
Local government spending and property taxes are not alone.
Looking across the 50 states, Truth in Accounting ranks the states on our bottom-line measure of government fiscal condition called “Taxpayer Burden.” In our latest analysis, the state of California ranked 43rd out of the 50 states, with a Taxpayer Burden of $22,000. Somewhat surprisingly the state of Texas didn’t even make the top half of the list, ranking 32nd with a Taxpayer Burden of $10,100.
Things get more interesting when you look at city governments.
Truth in Accounting ranks the 75 largest cities in the nation on our measure of their fiscal condition. California (15) and Texas (9) account for almost one-third of all those cities. The average Taxpayer Burden for the cities in both of these state is worse than the 75 city average, and the average ranking for the nine Texas cities is actually worse than the average for the California cities.