Texas vs. Maryland; Which model would be better for North Carolina?

by Doug Clark, Greensboro News-Record, September 18, 2013.

So it seems Texas Republican Gov. Rick Perry is visiting states headed by Democrats trying to lure businesses.

He ran radio and TV ads in Maryland with the message: "When you grow tired of Maryland taxes squeezing every dime out of your business, think Texas."

Not surprisingly, Maryland Gov. Martin O'Malley, a Democrat, hit back hard, calling Perry "all hat and no cattle" and writing a stinging op-ed in today's Washington Post.

I find this interesting for a couple of reasons. The first is that Perry and O'Malley may be angling for 2016 presidential nominations. This could be a taste of things to come.

The second is that, of course, the two present very different ideas about building a strong, more vibrant economy. Perry's way to improve the business climate is by cutting taxes and regulations. O'Malley's way is keeping taxes relatively low but generating enough state revenue to invest in good education.

As North Carolina now is angling to become more like Texas, the debate has echoes here.

(I should note that at 6.5 percent in Texas and 7.1 percent in Maryland, both states have unemployment rates that put North Carolina's 8.9 percent to shame.)

O'Malley blisters the Texas record:

"Texas ranks 49th in high school graduation, 10th in the rate of poverty and 50th in the percent of residents with even basic health insurance.

"And while Perry likes to promote the job creation in Texas during his time in office, he leaves out a critical point: The jobs 'miracle' he touts is driven by low-paying, non-sustainable jobs. This year, Texas — tied with Mississippi — leads the nation for the percentage of hourly paid workers earning equal to or less than the minimum wage. More than one in 10 workers nationwide earning at or below the minimum wage works in Texas."

Meanwhile, O'Malley touts rankings that put Maryland first in education, first in median income and first in "innovation and entrepreneurship (and) second in concentration of science, technology, engineering and math jobs and third for its 'talent pipeline.'"

All while remaining competitive in its tax rates, the governor claims.

There's obviously much more to say about the relative strengths and weaknesses of Texas and Maryland, and that ought to be said by objective analysts. Maryland, like Virginia, gets a boost from its proximity to our nation's capital where so much wealth happens to accumulate. But Texas is rich in energy resources.

North Carolina leaders should look at both models, realizing it can't draw from energy wealth or federal wealth. What can it offer? A low cost of doing business (based largely on tax burden and labor cost)? Or a highly skilled and educated workforce and first-rate infrastructure as well as competitive cost structure?

Texas or Maryland? Perry or O'Malley? Where are the answers we need here in North Carolina?