Some say Texas is the future of the US, much as California was for the early post-World War II period. In this latest Signals installment FSG considers some of the defining trends and events extant in the Lone Star State – and asks whether they are harbingers of similar changes in the rest of the nation.
The US in coming years will look more like the Texas in terms of racial and ethnic diversity. Today, 60 percent of the Texas population is non-white. As a nation, the US will not cross over into “majority-minority” territory until the mid-2040s. But according to sociologists Dudley Poston and Rogelio Saenz eight more states, led by Maryland, will turn majority-minority over the next 10 to 15 years. Once upon a time, that would point to clear advantages for Democrats. But recent elections have turned that thinking on its head, with Republican calls for low taxes and small government enjoying some appeal among ethnic voters from working and middle classes.
The US in the future will likely not see the rates of economic and population growth that Texas has seen in recent years, but maybe neither will Texas. Since 2005 Texas has seen real GDP increase by 60 percent and its population increase by 30 percent. While California enjoys a productivity advantage, with a higher per capita GDP, it hasn’t had the turbocharging effect of a large increase in population, at least in recent years. And California has ironically been a victim of its own success, with many businesses and employees leaving the state for the lower property prices and taxes, and an easier regulatory environment offered by Texas.
Texas’ economic success is not a viable model for all the US. As The Economist noted recently, no other US state enjoys the equivalent combination of energy resources, investment capital, land, labor, and low taxes. It is a remarkably broad-based success story. And what Texas has lacked in terms of a skilled workforce it’s been able to make up for by attracting domestic and international migrants, pulled in by abundant jobs, cheaper housing, no state income tax, and a uniquely upbeat Texas vibe.
Texas itself may have to make some major investments if it is to sustain its growth model. According to the Texas 2036 project, the state needs to make substantial investments in transportation infrastructure, public utilities and digital communications (about a third of rural Texans lack broadband connectivity), areas where it has fallen behind much of the rest of the nation.
Coastal cities in Texas and elsewhere know they need to protect themselves from rising seas. The eventual price tag is only a guess. Since 1950, for instance, Galveston Island has seen between 18 inches and two feet of sea-level rise, depending on who is measuring. Seas are rising faster on the US East Coast and the Gulf of Mexico then on the West Coast, and the trend is accelerating. A plan for “hardening” Galveston Island against storms is conservatively estimated at $30 billion. Outside of Texas, very few states or large cities are in a position to even consider public works projects of this scale.
Health, education, welfare and the future of Texas
“Soft infrastructure” – health care, education and public administration – will be key to sustained growth, and these are all areas where Texas significantly lags peer states. While its lower health expenditure per capita could be explained by its lower median age, Texas nevertheless ranks 38th out of 50 states in the 2022 United Health Foundation overall health rankings. Similarly, its education spending per capita is significantly lower than the 50-state average despite significant achievement gaps with the rest of the nation. Some 60 percent of all Texas K-12 students are not performing at grade level.
School choice has been a major priority for Gov. Greg Abbott, but Texas legislators have dealt his voucher program a setback. Across the nation 11 states have passed or introduced school choice bills in the last year. But just recently the Texas House voted decisively (86 to 52) to amend the budget and ban state funding for “school vouchers or other similar programs.” It seems that, as The Texas Tribune notes, many rural voters fear losing already modest public school funding if a voucher program was put into law. Meanwhile, Idaho, Iowa Idaho, Iowa, Kansas, Missouri, Nebraska, North Dakota, Oklahoma, South Carolina, Utah, and Virginia have passed or are considering bills to establish or expand private school voucher programs or education savings accounts that give families public funds to pay for private school tuition. (Full disclosure: FSG facilitates scenario planning for a Texas organization that supports public school leadership development.)
Texas may be out in front of a movement to prevent hospitals from charging fees for basic services. A Texas legislator introduced legislation prohibiting hospital outpatient clinics from charging fees for operational expenses related to preventive care or telemedicine. (“Preventive care” includes annual physicals, colonoscopies, and mammograms.) The rationale is to save patients money. Opponents claim it will cripple the operating budgets of already struggling small hospitals, especially in underserved communities. Across the US community hospitals are under stress, some closing and all under pressure to lower costs.
The doctrine of “private right of action” that is the foundation of the Texas law forbidding abortions after six weeks could be wielded by other states to target activity they oppose. The Texas law gives private citizens the power to sue women and doctors who end pregnancies. In California, it has been invoked in legislation targeting gun manufactures. In New York, legislation has been proposed that would allow individuals to pursue “any person, firm, corporation, or association that has been damaged as a result of a fossil fuel industry member’s acts or omissions… for recovery of damages.” This genie seems unlikely to go back into the bottle.