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What can Tory councillors learn from the Tea Party Governors?

 Florida has a population of 18.5 million. Texas has a population of 25 million. Both now have Governors endorsed by the Tea Party movement of grassrooots activists demanding smaller Government and lower taxes.

Much has been said about the anti establishment nature of this movement. But it is not mindlessly so. In the case of Texas they were backing the re-election of Rick Perry. His message was strongly one of how low tax is the path to job creation. This could become more relevant in British local elections in future years if councils gain the power to set business rates.

The National Review says:

Texas already looms large in its own imagination. Its elevated self-image didn’t need this: More than half of the net new jobs in the U.S. during the past 12 months were created in the Lone Star State.

According to the Bureau of Labor Statistics, 214,000 net new jobs were created in the United States from August 2009 to August 2010. Texas created 119,000 jobs during the same period. If every state in the country had performed as well, we’d have created about 1.5 million jobs nationally during the past year, and maybe “stimulus” wouldn’t be such a dirty word.

What does Austin know that Washington doesn’t? At its simplest: Don’t overtax and -spend, keep regulations to a minimum, avoid letting unions and trial lawyers run riot, and display an enormous neon sign saying, “Open for Business.”

At bottom, the struggle between national Republicans and Democrats is over whether the country will adopt a version of the Texas model, or of the Michigan, New York, or California model. Will government allow the private sector to thrive, or stifle growth with its hyperactivity and favoritism for anti-business interests? If migration were a referendum, the Texas model would be winning in a rout — more than 1,300 people a day moved there between their 2007 and 2008 tax filings, according to Internal Revenue Service data.

The Wall Street Journal says:

The migration of factories, capital and jobs to states like Texas is no accident. Texas is a right to work state, meaning that workers cannot be compelled to join a union. Texas also has no income tax, which gives its firms a roughly 10% cost advantage over a "progressive" state like California.

There is also a lesson here for Washington. The job-free zones of California, New Jersey and New York each tax the rich more than nearly all other states. In these states the top 1% wealthiest taxpayers bear roughly 40% of the state income tax burden, but their budgets are still a mess and the job losses continue. If the next crop of Governors and the 112th Congress want faster growth and more job creation, they'll avoid the mistakes of California and New York and learn from Texas.

In Florida the incumbent governor, Charlie Crist, was elected as a Republican (although is now independent.) But the new Governor elect, Rick Scott, offers a very different approach. As well as promising to cut tax and spending he puts emphasis of the need to reduce red tape:

The Pacific Research Institute ranks Florida’s regulatory framework as being 45th in the nation. This is killing jobs. As Governor, I will impose a regulatory freeze and immediately begin a comprehensive
review of all existing and imposed regulations. We must strike a balance between regulations necessary to protect the interests of our state while creating an environment for our economy to grow without being strangled by regulation. In order to accomplish this, I will institute a moratorium
on any new regulations that stunt job growth in our state and eliminate duplicative, outdated or obsolete rules and permitting processes.

Spending transparency is another strong Tea Party theme. Nikki Haley, the new Governor of South Carolina, stresses it in her stump speech posted above.

I want all of our taxpayer spending online. You are busy. You will probably never look at it. But if they know you can see it they will have to be responsible for how they spend. I compare it to the teacher in the classroom. When the teacher's in the classroom, the kids are fine. When the teacher walks out of the classroom what happens? The kids play up a little bit. Not because they are bad kids but because they can. I want you to be the teacher in the classroom. I want you to be able to see the spending habits of your Government.

There are similar message from several other new governors. John Kasich who won in Ohio. Mary Fallin who won in Oklahoma. Paul LePage who won in Maine. Susana Martinez who won in New Mexico. 

I will be interested to see how they get on.


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