Don’t mess with be­com­ing Texas

Our view: The low-tax, low-reg­u­la­tion model isn’t a win­ning for­mula for Mary­land

Baltimore Sun - - FROM PAGE ONE -

Aformer Wall Street Jour­nal writer who now labors for The Her­itage Foun­da­tion and ad­vises Don­ald Trump on eco­nomic mat­ters breezed into the Bal­ti­more area this week to preach to the choir. Ap­pear­ing be­fore Mary­land Busi­ness for Re­spon­sive Govern­ment, a group whose mem­bers have long be­lieved they re­side in an “anti-busi­ness” state, Stephen Moore urged Mary­land to be more like Texas, where taxes and reg­u­la­tions are low and job growth is high.

He sin­gled out Mary­land’s fail­ure to adopt “right-to-work” rules that se­verely limit or­ga­nized la­bor, its ef­forts to reg­u­late frack­ing of nat­u­ral gas (“Be­ing against frack­ing is like be­ing against a cure for can­cer,” Mr. Moore told the group, ac­cord­ing to Mary­landRe­ and its high in­come tax rate that is el­e­vated by lo­cal “pig­gy­back” in­come taxes that are rolled in. He noted that Texas has cre­ated more jobs since the 2008 re­ces­sion than all the rest of the states com­bined.

Now, we can ap­pre­ci­ate cheer­lead­ing as much as the next bleary-eyed refugee from a ho­tel break­fast con­fer­ence, but if there’s one bit of ad­vice we would give Mary­land busi­ness lead­ers it would be this: Don’t be like Texas. Ever. With all due re­spect, it’s ev­ery­thing we don’t want to be.

But don’t take our word for it. Ev­ery year, the non­profit, non­par­ti­san Annie E. Casey Foun­da­tion eval­u­ates the lives of chil­dren and fam­i­lies across the coun­try, com­pil­ing sta­tis­tics that re­veal how well fam­i­lies and chil­dren fare in such mea­sures as in­come, ed­u­ca­tion, health and com­mu­nity. Mary­land earned top-third sta­tus for over­all child well-be­ing, rank­ing 16th among the 50 states. And Texas? Right down there at 43rd with such no­ta­bles as Mis­sis­sippi, Alabama and Louisiana.

That’s be­cause Texas, for all its job growth, has done a lousy job of lift­ing peo­ple out of poverty and pro­vid­ing eco­nomic op­por­tu­nity. The state’s un­em­ploy­ment rate, 4.7 per­cent as of Au­gust, is higher than Mary­land’s 4.3 per­cent. Its teen dropout rate is worse than Mary­land’s as well. Chil­dren with­out health in­sur­ance cov­er­age? It’s not even close — in Texas, it’s about 11 per­cent while in Mary­land, it’s just about 3 per­cent.

The sta­tis­tics go on and on. Much of the prob­lem can be traced to so-called “con­ser­va­tive” pol­i­tics that fa­vor the af­flu­ent at the ex­pense of the mid­dle class and be­low. Texas re­fused the fed­er­ally funded Med­i­caid ex­pan­sion, so now it suf­fers from some of the na­tion’s high­est child­birth mor­tal­ity rates. It has failed to pro­vide eq­ui­table fund­ing for its public schools, so now stu­dents in wealthy school dis­tricts re­ceive far bet­ter ed­u­ca­tional op­por­tu­ni­ties than those in less priv­i­leged cir­cum­stances. The NEAre­cently ranked Texas 38th among states in per-pupil spend­ing.

There’s no ques­tion that Texas has seen job growth be­cause en­ergy com­pa­nies have tapped the state’s vast un­der­ground re­serves of petroleum and nat­u­ral gas. Mary­land doesn’t have that kind of eco­nomic as­set, but it does have one that is the envy of its peers — an ex­traor­di­nary re­serve of hu­man cap­i­tal, a welle­d­u­cated work­force with re­search in­sti­tu­tions like Johns Hop­kins Hospi­tal and the Univer­sity of Mary­land Med­i­cal Sys­tem ideally lo­cated near to the na­tion’s cap­i­tal and at the mid­way point of one of the na­tion’s most pros­per­ous busi­ness cor­ri­dors.

Well-be­ing won’t come from aban­don­ing the in­come tax. Rather, it re­quires pre­serv­ing the state’s ex­traor­di­nary qual­ity of life and in­vest­ing in high-qual­ity ed­u­ca­tion and the public in­fra­struc­ture (roads, water and sewer, air­ports, a mod­ern elec­tric grid, etc.) needed to sus­tain eco­nomic growth. Who needs a high growth rate if it leaves more peo­ple be­hind? What good does it do the state to dereg­u­late frack­ing if it means pol­lut­ing our water sup­ply and ru­in­ing our tourist trade?

Taxes? They should be as low as they can be while still cov­er­ing our needs. Reg­u­la­tions? If they are un­help­ful, they should be scrapped from the books. But scratch be­low the sur­face of these clas­sic red-state-red-meat is­sues, and you rarely find them as sim­ple as pun­dits like to claim, with reg­u­la­tions of­ten help­ing val­ued busi­nesses against less scrupu­lous com­peti­tors. Me­dian house­hold in­come in Mary­land was $75,847 last year, 2.4 per­cent above 2014, ac­cord­ing to the Cen­sus Bureau — and more than $20,000 above Texas. The poverty rate here was the low­est in years — and about half the rate in Texas.

The ques­tion is not how Mary­land can be more like Texas. It ought to be, how can Texas be more like Mary­land?

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