Well, it’s Hump Day everybody, and you know what that means.
No, Bill Clinton, THAT’s not what it means! It’s just Wednesday.
But this Wednesday, I’ve got a transitional column for you. My last three columns were a departure from my usual juvenile humor and mockery of imbeciles in the news, as I discussed checks and balances in our government, almost like a reasonable adult would.
This Friday, I’ll be back within my wheelhouse, snarking away at some Dems who have really out-done themselves in dumb-assery lately.
But today I’m going to celebrate one aspect of checks and balances – federalism – based partly on my own experiences.
Regular readers may remember that I was born in Illinois in the 19th century. (Small-town north-central Illinois in the 1970s was essentially the same as in the 1870s, but with cars instead of horses, and Cheap Trick on an 8-track in my ’72 Gran Torino.) I spent my first 24 years in Illinois, before I moved to Florida to get my PhD in English, and meet and close on my smokeshow wife. Since then, I’ve lived in the Free State of Florida.
So I can compare my beloved (but tragically blue) home state of Illinois to my adopted (red) home state of Florida. (I wasn’t born here, but I got here as fast as I could.) I will also include another blue state – New York – for a more apples-to-apples comparison to Florida. And I’ll consider these three states in two areas – taxation, and size and cost of state government – starting with the latter.
Size and Cost of State Government
One of the core tenets of conservatism is a preference for a smaller government. One famous saying that encapsulates the idea – variously attributed to Locke, Jefferson and Thoreau – is “that government is best which governs least.” Accordingly, red states tend to have smaller state governments, while blue states have much larger ones. That tendency certainly applies to Florida, Illinois and New York.
There are different ways to calculate state government employment, which can be affected by issues such as how full-time vs part-time workers are counted, how seasonal variations and seasonal workers are counted, etc. But for an apples-to-apples comparison, the following stats all come from the St. Louis Federal Reserve Bank:
Florida’s population is 23.4 million residents, and it employs 117,300 government workers.
New York state’s population is 19.9 million, and it employs 262,700 government workers.
Illinois’ population is 12.7 million, and it employs 143,000 government workers.
Those numbers work out to a stark difference in per capita government workers: Illinois has 89 workers per 1000 residents, New York state has 76, and Florida has only 20!
The three states’ respective budgets naturally reflect the size of their work force. This year, Illinois’ budget is $55.2 billion, New York’s is $245 billion, and Florida’s is $117 billion.
So Florida has only about a quarter of the per capita government employees that New York has, and only about a fifth of those that Illinois has, and thus needs to spend way less to maintain its government services.
It would be one thing if the citizens of Illinois and New York could point to a superior quality of life that they’re getting for all of the extra money they’re spending on their government. Are their streets safer, cleaner, and better maintained, and their kids better educated, and their public services more responsive and better-performing than those in Florida?
Nobody believes that.
Florida and New York are the third and fourth most populous states respectively, and thus provide the closest comparison. And New York, despite having 20% less population, has 44% more state employees, and a 48% higher budget than Florida!
Taxation
The leaner and more efficient state government in Florida makes itself felt in its much smaller tax burden. Florida has no state income tax. Illinois has a flat 4.95% income tax rate. New York’s income tax ranges between 4% and 10.9%; the level for middle income earners (between $89-215K per year) is 6%.
Those varying tax rates make a huge difference over an average working life! As an example, take someone who earns an average of $50K per year (inflation adjusted) for 40 years. In that time, she would have earned $2 million, and if she lived in Illinois (with a 5% state income tax rate), would have paid $100,000 in state income tax that a Floridian would have been able to keep and invest.
It’s hard to calculate the value of that extra $100K of earnings after those 40 years. At least it is for me, as an English major. (I’m sure it would be a snap for big brains in CO nation like CO, Chris Silber, and others.) But I do know that money invested pre-tax in an investment that makes around 10% — just a little over the average of the S&P these last 40 years – doubles every 7 years. Of course, that $100K wouldn’t have been received in a lump sum 40 years ago, but parceled out in yearly increments.
Like I said, I can’t figure it out exactly. But I think it’s a safe conservative guess that if that money had been mostly invested in a decent mutual fund over 40 years, it would at least amount to around $250,000 now, and probably a lot more. And that is just one economic consequence of living in a no-income tax red state vs. Illinois for an average working life: a quarter-million extra dollars of net worth!
Other economic disparities are just as consequential. Property taxes are usually higher in blue states, as well as the costs of starting a business, or building a home. I know that the amount of property taxes my relatives in Illinois pay – adjusted for the value of the house – are nearly 4 times what I pay in Florida. I was able to buy fixer-upper rental houses with less red tape and cost, and they’ve appreciated way more than the same places in Illinois would have. When it came to college for our kids, we’ve been able to pay less for a higher quality education than we would have in Illinois.
Of course, money isn’t everything. Crime rates, homelessness and illegal immigration also impact quality of life. And red states generally perform better in those areas, too. We support our police, and they tend to catch more criminals, who spend more time in prison for their crimes. Unexpectedly!
Results
Migration patterns demonstrate the utility of federalism, which allows Americans to “vote with their feet” by moving from states who have favored higher taxes, larger government, and consequence-free crime, and to states who have taken the opposite approach.
The experiments have been going on in the little laboratories of our states all over the country, and the results are in. And once again, New York and Florida provide instructive examples.
In the year 2000, Florida’s population was around 16 million. By 2015 it had grown to just over 20 million, and now it is around 24 million. By comparison, in that same quarter-century, New York state has grown by less than a million, and Florida overtook it as the third largest state. And the trends are diverging even more, with Florida gaining momentum, and New York actually losing 300,000 people over the last 5 years!
I’m not arguing that population growth is always and everywhere an unalloyed benefit. If you ask most long-term Florida residents, they would probably tell you that our quality of life wouldn’t suffer if we had a few million new residents, at least.
Especially when they bring with them the voting patterns that produced the results that made them flee New York, Illinois or California in the first place!
But voluntary, net population growth is by definition a metric of perceived success. People move to places they think are better than where they are moving from, and they flee places they think are worse.
That’s been going on for a very long time on the national level, with immigrants flooding into America from all over the world. And now it has been going on for a while within our country.
Am I saying that we should build a wall around our red states and start vetting refugees from blue states as thoroughly as we should have been vetting refugees from Somalia, Venezuela, and Jihadistan?
I’m saying we should have that conversation.
Hamas (and Trantifa) delenda est!
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Martin Simpson 