Hmmm, Tucson or Houston; which city is more prosperous?


By Lionel Waxman, Inside Tucson Business
Published on Friday, March 13th, 2009

Woe, oh woe. The economy is killing us. If you’re suffering, you have plenty of company. It is beating up everyone. Well, not quite everyone. There is a place in this country that is still experiencing prosperity. The residents of Houston, Texas, aren’t participating in the recession. Their economy is booming.

It seems like a different world. Is Houston not connected to the rest of the United States. What magic keeps their economy buoyant while the rest of the country is crying in its (cheap) beer?

Let me contrast the business environment in Houston with that in Tucson. Not to drive Tucsonans to Houston but perhaps to infiltrate a bit of Houston’s good fortune to Tucson.

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Actually, it isn’t fortune at all. It is the result of definitive decisions to make Houston attractive to business. No matter what the geniuses in Washington say, business is the engine of prosperity, not government. And business is catered to in Houston. Oh, sure, oil is a big part of Houston’s economy, but that can cut either way. We have seen oil prices go down as well as up. But as the locals say about their city, “No problems here.”

There is a lot more there. For example, the Texas Medical Center employs 100,000, running two medical schools and 14 hospitals. Suddenly broke broker-dealers on Wall Street are brown-bagging their lunches. In Houston, it’s time for thick steaks and all the trimmings.

And get this; real estate prices continue to rise in Houston. According to a report by Altos Research, the average home price increased 0.3 percent to $217,000 in the last year. Quite respectable by today’s standards which are mostly declines.

According to government statistics, Houston is bustling with a job growth rate of 3.4 percent. Houston is one of the fastest growing metro areas in the country.

Construction still abounds with jobs growing at nearly 5 percent on an annualized basis, while manufacturing jobs rose at 2 percent. And there are plentiful job openings especially in construction and engineering. The unemployment rate is 3.8 percent, considered full employment by any measure.

The cost of living in Houston is about 88 percent of the national average. Median household income is $50,250 and growing.

Alright, enough statistics. You get the idea. So how did the picture in Houston get so much brighter than the rest of the country?

One reason might be that it is not waiting to see what surprises are in store for us from our employees in the District of Columbia. Houston just works. (D.C. itself is an instructive example of municipal suicide. It is a total creature of Congress, yet a city where crime is rampant and much of the population is on hard times even with the huge generator of the federal government in its midst.)

But let’s not compare Houston to D.C., which is a Constitutional anomaly. Let’s compare Houston to Tucson.

Houston barely taxes businesses at all. That’s in stark contrast to Tucson and most of Arizona which burdens businesses with many taxes and restrictions because individuals vote but businesses do not.

While many of us are getting ready to pay both Uncle Sam and the state a tax on our incomes, the folks in Texas only worry about what they’re going to cough up to the feds. There’s no state income tax.

Here’s one that everyone can appreciate. Registration renewal fees for automobiles run $54 to $72 per year. Make your mouth water? Well I should say! The general sales tax is 8.25 percent but there are myriad exemptions for equipment for business and industry.

And here’s a unique attribute Houston has: no zoning. That’s right, you can build a dynamite factory right next to the school house. But for some reason, nobody does. Imagine eliminating all the haggling with city and county satraps, all the begging and cajoling for permits and authorizations.

Houston exudes capitalism. It appears to be a city built by and for capitalists, producers, entrepreneurs.

Tucson emits an air of environmentalists, social workers, and people who take Al Gore seriously. Prosperity here is in spite of the business climate not because of it. The beggar-thy-neighbor philosophy is the basis of our tax laws. Special taxes designed to burden the visitors who don’t vote here do not endear us to them and the businesses trying to serve them.

But don’t move to Houston. Bring some of the Houston’s attitudes here. Houston is proud of its urban sprawl. It makes money and making money is what makes Houstonians happy. It seems Tucson has decided money is secondary to a stagnant preservationist ethic that prefers conservation to production. It’s a choice we have made. But we can revisit it.

Contact Lionel Waxman at territorial@waxmanmedia.com or visit his website: www.waxmanmedia.com. Lionel Waxman’s Flashpoint commentaries are published in The Daily Territorial.

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Have you ever actually read what you’ve agreed to? You should
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Americans are too good to participate in the recession

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