Don’t mess with becoming Texas
Our view: The low-tax, low-regulation model isn’t a winning formula for Maryland
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 MarylandReporter.com) 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?