Texas and California share a number of economic and demographic traits, but what they don’t share is a road to recovery out of the national recession. Fortune magazine notes how Texas has plowed its way through the downturn, creating jobs and investment, while California remains mired in an economic malaise not forecast to end anytime soon.
So what’s the difference? Four things, says Fortune:
1) Better overall industry diversity in Texas, making it less susceptible to job losses in sectors like housing directly tied to the causes of the recession.
2) Perception of a significantly friendlier environment for business in everything from regulation to taxation to unionization
3) A Texas tax structure that relies on sales taxes instead of more volatile income and capital taxes.
4) California’s referendum-driven political environment, which makes consensus building a difficult challenge and often results in a conflict of spending increases and limits on taxes
Fortune’s take on a tale of two states is here.