Do the Red States refuse to improve the economic outlook?
The Red States like to brag about how business friendly they are. But you don’t hear them bragging about being citizen-friendly.
The traditional Republican formula for success at the state level has been low taxes and light regulation. The theory is that it will attract businesses and residents. The formula has worked in Texas, Florida and Tennessee. Not having income tax seems to be a big plus.
But get out of the Sunbelt, and the same approach doesn’t have such a good track record. Kansas passed deep income tax cuts in 2012 under the leadership of Republican Gov. Sam Brownback, as well as cuts to spending on education, foster care and other social services. But the tax cuts were reversed after the drop in income created a fiscal crisis and no economic boom. Kansas also led what the Kansas City Star labeled “One of America’s most secret state governments,” so much so that they fired the DOT spokesperson for honestly saying the state did not have enough funds to rebuild a stretch dangerous road. The Star found that 90% of state law was written by anonymous authors. Kansas’ job growth has been lagged far behind the country over the past decade, and 86% of Kansas counties are losing population.
Or look at Indiana. It has had Republican governors since 2005 and full Republican control of the state for over a decade. Its rulers love to brag that its rate of population and employment growth outstrips neighboring states, but it’s a hurdle to overcome. In reality, most of Indiana is stagnating or shrinking. More than half of the state’s counties are losing population, and forecasts for the prime working-age population are grim: almost the entire state is expected to have a workforce. declining in the years to come. Indiana’s per capita income is only 86.2 percent of the national average, and that’s lower than it was when the GOP took over the governorship and legislature. Under Republican leadership, the state started out poor and grew even poorer.
Why these poor results in states with the full panoply of Red State best practices? This is because the whole philosophy of governance in Kansas, Indiana, and many other Republican states is based on a fundamentally flawed view of progress. Rather than investing in skills development and improving the well-being of their citizens, they have embarked on a race to the bottom as a strategy to attract business.
All too often this can turn into a totally anti-citizen mindset, with governors and legislatures bowing down to the worst kinds of parasitic industries and vested interests. For example, when a series of reports from the Indianapolis Star gruesome conditions detailed in local rental properties, the city passed an ordinance requiring tenants to be made aware of their rights (e.g., to have working plumbing, safe wiring, and heating in the winter – the very basics). The state legislature quickly overturned it at the request of the landlord lobby.
Indiana is a great place to be a dump, but not such a great place to be a renting citizen. It is a pattern that recurs too often. the Indianapolis Star
also revealed how the state’s nursing home industry had become a giant scam. County hospitals nominally own most of the state’s nursing homes, which allows them to charge Medicaid at a higher rate. More than $ 1 billion has been siphoned off nursing homes to fund hospital construction projects and inflate the salaries of county hospital executives as the state was ranked 48e in the country in the staffing of nursing homes. Over 20% of COVID-19 patients in Indiana nursing homes deceased, against a national rate of 13%. The state’s response to this? A forecast bill extended immunity from liability for retirement homes that kill.
It’s a different story when it comes to pro-citizen changes, which are becoming much more skeptical. In addition to overturning tenant protection, Indiana flirted with the cancellation of a transit expansion in Indianapolis that was widely supported by voters, and gutted a bill that would have required employers to provide basic accommodation for pregnant women. (Pregnant women can now request accommodations, but employers do not have to provide them). Going through the list of bills making their way through the state legislature, it’s hard to see much that could even plausibly improve the lives of the citizens of Hoosier.
Too many red states like Kansas and Indiana are great for the well-connected but bad for the average citizen. It should be the opposite. They should make being a “citizen-friendly state” their North Star. They should work to improve the lives of those who call them home, whether they are renters, pregnant women, nursing home residents, people who do not own a car, or whoever they are. ‘other.
One might think that this is the first duty of a state government. But it is also good business sense. The most important factor in attracting high-paying employers is the availability of a skilled workforce – talent. Rather than a race to the bottom, these states should invest in strengthening their populations. And create the kind of environment that people want to settle there on the merits of the state – not just because it’s cheap. This will be doubly critical in a post-coronavirus world where more workers will have the flexibility to live where they want.
Becoming a Texan magnet for migrants may never be considered for most of the northern red states. Population growth has been strongly associated with warm winter temperatures, natural amenities, and lack of income tax. This is what Texas, Tennessee and Florida have. The northern red states don’t have all of that. But by being citizen-friendly, they can make themselves more attractive to newcomers than they are today and improve the quality of life of those who already live there.
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