Christmas has come a few days early this year in the form of the decennial data dump from the U.S. Census Bureau that kicks off the redistricting scramble. The reapportionment numbers were not only hugely consequential for the makeup of the next Congress and the durability of the Republican majority, but even a cursory look at the state-by-state numbers one sees the clearest possible vindication of conservative ideas at the state level. Dare I say, this week's numbers were the most ringing endorsement of the Republican governing model since Rudy Giuliani towered over the vested interests in New York City. Not only did the South and West win -- which liberals will dismiss as a function of weather -- but low tax states consistently beat high tax states. Not only did conservative states beat liberal states, most tellingly, the winners were almost to a man conservatively governed.
Consider this striking fact unearthed by political strategist (and former Giuliani adviser) Ken Kurson, posted on Facebook:
Avg tax rate in states gaining a Congressional seat: 2.8%
Avg tax rate in states losing a Congressional seat: 6.05%
People vote with their feet.
This finding is relevant to top marginal tax rates, which unlike property or sales taxes more prevalent in redder states punish creation rather than consumption, but the basic finding runs deep throughout the numbers. The big population winners did not just happen to red states with nice weather. They also had a deeply embedded Republican governing model. Consider who governed in the big population-gaining states this year.
Texas +4 (10 years of Republican governors, 0 Democrat)
Florida +2 (10 Republican, 0 Democrat)
Nevada +1 (10 Republican, 0 Democrat)
Utah +1 (10 Republican, 0 Democrat)
South Carolina +1 (8 Republican, 2 Democrat)
Georgia +1 (8 Republican, 2 Democrat)
Arizona +1 (2 Republican, 8 Democrat)
Washington +1 (0 Republican, 10 Democrat)
Collectively, that's 58 years of Republican governance to 22 years of Democratic governance in the states gaining Congressional seats. And Washington State's impressive record -- alone among true blue states -- likely had more to do with the little matter that it lacks an income tax, and an initiative this year to impose one was beat back by 2-to-1.
More than that, the leadership of these growing states has not only been Republican, but very much conservative: Rick Perry (whose approach to luring jobs from high-tax states is methodical and focused like a predator stalking his prey), Jeb Bush, Mark Sanford, and Sonny Perdue.
Other gems abound in these numbers, providing us an acid test on the difference between good and bad policy.
Michigan's prevailing wage union economy has wreaked more devastation than Hurricane Katrina did to Louisiana. Michigan was alone among the states to lose population, losing 0.6% of it. Louisiana (which had to deal with the destruction and relocation of major portions of its biggest city in this decade) gained 1.4%.
The Northeast continues to bleed, especially its dying, secondary metros. New York state, which absurdly tried to levy an iPod tax under the hapless Gov. David Paterson, limped along with 2.1% growth (the national average was 10%). We don't have county numbers yet, but we can infer that the New York City area, and especially the suburbs, were the bulwark of any growth. Both New Jersey and Connecticut, which are roughly half New York City suburbs, outperformed the entire region (4.5% and 4.9%, respectively, to the Northeast average of 3.2%). This shows us that there is still a creative class and professional allure to major metropolitan areas that can partially counteract high taxation. But what happens to the remnant, secondary metropolitan areas out of reach from New York City or Boston? There, you have no creative class and sky-high taxes forced upon them by liberal city-dwellers. The bottom line: Goodbye Buffalo, Rochester, and Syracuse. A similar dynamic is at play in New England. High-tax, secondary metro Rhode Island performed worst (at anemic 0.4% growth) while the Boston bedroom communities of income-tax free New Hampshire lifted it to a region-leading 6.5% growth rate. The Granite State is like a miniature version of Texas up north: increasingly metropolitan and lightly taxed.
The Midwest is also hurting, but good policy saves the day. The Midwest fared only slightly better than the Northeast at 3.9% vs. 3.2% growth, but here one begins to see the difference policy makes. The damage here was done by both Democrats and weak sister Republicans. Michigan, which stubbornly refused to change under eight years of Jennifer Granholm, has the nation's worst economy and population growth. (Let us hope, for the sake of the survival of that state, that Governor Rick Snyder and his Republican majorities in the House and Senate can deliver a Right-to-Work law.) Ohio has the second worst, under the consecutive administrations of the corrupt, tax-raising Bob Taft (a Republican) and Ted Strickland (a Democrat). Like Snyder, John Kasich has the opportunity to emerge as a hero of the recovery. But aside from tiny South Dakota, the state in the region with the best population growth at 7.8% -- 4 points higher than neighboring Iowa and 2 points higher than neighboring Wisconsin, was Minnesota, where Tim Pawlenty held the line on taxes and spending for two solid terms. (Disclaimer: I help with Gov. Pawlenty's Freedom First PAC.) Likewise, there is no real reason that industrial Indiana should have performed any better than neighboring Illinois or Ohio other than its distinctively Republican orientation and the budget-cutting leadership of Gov. Mitch Daniels. Illinois, the state whose political leadership this decade consisted of Rod Blagojevich and Barack Obama, turned in a mediocre growth rate of 3.3%, lower than all of its neighbors.
For the First Time, the South Leads the Nation in Growth. Past Censuses showed the nation's growth tilted West. For the first time, the South took the crown this time, with an overall growth rate of 14.3% to the West's 13.9%. That's a turnaround from 2000, when the West led with 19.7% growth to the South's 17.3%. It's also perhaps a sign of the waning power of immigration as a driver of that growth (it tilts west, though heavily Latino Texas is considered part of the South). In many ways, this past growth was also because the West was the only truly "new" and underpopulated region for the better part of the last century. The 2010 Census shows the trend is definitely waning. The only state with a truly torrid growth rate was Nevada, at +35% -- but it was 66% (!) in the 1990s. The filling out of the interior and mountain West is also slowing. +24% and +21% growth in Utah and Idaho respectively show that it's not just about good weather, but those numbers represent declines of about 15 to 20 points from '90s growth rates.
The Rise of Texas and the Decline of California. The blaring headline from the 2010 Census is, of course, Texas picking up 4 Congressional seats, landing at 38 total electoral votes. The last time a non-California state had this many was New York in the 1980s. At the same time, California leveled out at 55 electoral votes, the first time since the 1920 census that they haven't gained seats. Joel Kotkin has an excellent read on the California-Texas dynamic, stoked by Rick Perry who boasts of "hunting" for jobs every time he visits the Golden State.
Texas's 20.6% growth off an already strong base shows its continued promise. California's 10% growth was the weakest in the West save for Montana (9.7%), showing again that even with its favorable geographic positioning, government for the public employee unions, by the public employee unions bleeds jobs and natives. Both states are bouyed by high immigration, much of it illegal (with Texas seemingly avoiding the social friction that characterizes the trend in California and Arizona). While Democrats wax hopeful that long-term demographic trends will ultimately save them (Democrats have been waiting in vain for a blue Texas since the days of Ann Richards), but they forget that many of these are nonvoters (hence the enduring push for amnesty). In California's case, counting illegal immigrants serves to prop up the state's Democratic electoral college block (without really changing the internal electoral dynamics of the state, in terms of new voters added to the rolls), while in Texas it helps add a few more Republican electors. The net effect of immigration is thus a wash in terms of national elections.
The outflow from California can also be seen in the continued phenomenal growth of neighboring Nevada and Arizona. One telling story is that of Zappos, which moved its headquarters from San Francisco to Las Vegas this decade because the lack of a real middle class in the Bay Area made it difficult to find call center employees.
The Curious Case of New Mexico. Here's another state where bad policy may be making a difference: New Mexico. Like its neighbors on the border, the state feels the impact of immigration. Yet its growth is a respectable but less than torrid 13.2%, almost half of Arizona's and a full seven points below Texas. Only Colorado's 16.9% comes close. Politically, New Mexico has been seen as a haven for corruption, is heavily dependent on government employers (the national labs), and has been ruled by Democrats including Bill Richardson. If there is any newly elected governor who's well positioned to make a difference with fiscally sound policies, it's Susana Martinez.
New York Nearly Fades to 4th Place. If there's a cautionary tale California should heed, it's New York. 2010 was the year California topped out its power and influence on the national stage, and may face an actual decline in Congressional representation in years to come. New York has been in population free fall for some time now. Once the Empire State in both name and fact, Florida is now within 500,000 residents of overtaking it. New York's decline from 1st to 4th seems inevitable.