'Analysis: Texas vs California: A tale of two budget deficits'.
'Texas Governor Rick Perry treated guests to a barbecue lunch paid for by a wealthy businessman. Supporters of California Governor Jerry Brown munched on hot dogs at a union-sponsored picnic. The stark contrast in inaugural menus last month highlights the different approaches the two most populous U.S. states are taking to deal
with massive budget deficits. Perry, a Republican, campaigned on the strength of the Texas economy and made political hay of the fact the Lone Star state had avoided California's massive deficit, pegged at $25.4 billion through the upcoming budget year. Now Texas faces a budget deficit estimated as high as $27 billion
for the upcoming two-year cycle of 2012-2013. To close the gap, state legislators have proposed steep cuts in funding to education and welfare programs.'
'The lecturing from Texas leaders about how California wouldn't be in such a budget mess if its politicians did business the way it is done in Austin has been relentless for years.
''The Texas budget crisis is prompting some experts to reconsider what had been dubbed the Texas Miracle
. The state has much lower unemployment than California, but economists note that many of the jobs are low-paying. One out of three wage earners in Texas earns too little to keep a family of four above the federal poverty level, according to a 2009 study by the Corp. for Enterprise Development, a Washington-based nonprofit. That is double the percentage of similarly low-wage Californians.
Such figures call into question whether Texas' economy has really transitioned into a new 21st century model, or whether it has been buoyed by high oil prices and lots of loosely zoned land where construction of cheap houses endured through the recession.
"You have to separate out what your public policies have done for you and what God has done for you," said Scott McCown, executive director of the left-leaning Center for Public Policies and Priorities in Austin. "People shouldn't be fooled by what is going on here."
Texas lags far behind California in major research universities, patents produced, high-tech infrastructure and venture capital investment, according to the Missouri-based Kauffman Foundation. The foundation's 2010 ranking of states in "movement toward a global, innovation-based new economy" put California at No. 7. Texas was No. 18.
"Their model is a low-wage economy with greater income inequality," said John Ellwood, a professor of public policy at UC Berkeley. "For all the talk of Texas being a high-tech state, they have never really caught up to California.… Look at the big new growth companies. Where is Facebook? Where is Google? Are any of these companies in Austin? No."'