Published February 16, 2013
Cowboy boot-wearing Rick Perry attracted national attention this month when he traveled to California dangling the twin carrots of lower taxes and fewer regulations to try to poach residents and businesses.
Yet the Texas governor is not alone in such efforts, with Republican lawmakers from such states as Florida, Virginia and Wisconsin making similar moves. As part of a broader ideological battle among the states, officials are trying to lure business and grow their own economies by extolling the virtues of a small-government climate.
Perry’s foray started with a radio campaign in which he urged California businesses frustrated by myriad regulations and new tax increases to “come check out Texas.”
“Our low tax taxes, sensible regulations and fair legal system are just the thing to get your business moving to Texas,” Perry said in the 30-second spots.
California Democratic Gov. Jerry Brown dismissed Perry’s bid, but the Texas governor doubled down this week by flying to California to personally talk with high-tech, entertainment and other industry executives from the Bay Area to Orange County.
While Perry was making the Lone Star pitch in California, Texas Attorney General Greg Abbott was busy trying to take advantage of New York Democratic Gov. Andrew Cuomo, who recently enacted tighter gun laws.
“Keep your guns, come to TX,” Abbott wrote in a New York newspaper online ad.
While Perry has mostly taken a low-key approach, Florida Republican Rep. Trey Radel’s strategy is more like Abbott’s.
Radel mocked Minnesota’s recent tax-increase proposal, in a bid to turn Midwestern “snow birds” into Sunshine State residents.
“It's my sincere hope your plan has just driven many Minnesotans to become year-round residents of our great state,” Radel said in a letter to Minnesota Gov. Mark Dayton regarding his plan to tax the investment income of snow-driven seniors and other part-time residents.
Wisconsin Republican Gov. Scott Walker also has tried to lure away Minnesota residents, in part by highlighting another Dayton proposal to impose a sales tax on business services.
However, such efforts are cost-inefficient and produce few new jobs, according to a report released last month titled “Job Creation Shell Game.”
“Interstate job piracy is not a fruitful strategy for economic growth,” writes Greg LeRoy, of Good Jobs First, the Washington-based, non-partisan think tank that published the report.
LeRoy argues that poaching – which includes billions of dollars each year on economic development subsidies -- is a waste of taxpayer money because it largely amounts to a “geographic reshuffling of existing jobs,” instead of new business activity.
“What was long ago dubbed a Second War Between the States is, unfortunately, raging again in many parts of the country,” he concluded.
New Jersey Republican Gov. Chris Christie and South Dakota Republican Gov. Dennis Daugaard have tried in the past to lure Illinois residents away with the promise of lower taxes.
But no lawmakers appear to have engaged in a more head-to-head competition than Virginia Republican Gov. Bob McDonnell and next-door neighbor Maryland Democratic Gov. Martin O’Malley.
The competition between McDonnell and O’Malley has lasted for years and appeared most fierce when the economy was struggling to recover from the recession.
McDonnell won two of the biggest competitions.
He persuaded defense contractor Northrop Grumman in 2010 to make Virginia its new corporate headquarters. A year later, he got engineering-construction giant Bechtel Corp. to move several hundred jobs from Maryland to Virginia, typically ranked among the country’s most business-friendly states.
“We continue to compete and never like to lose,” O’Malley said at the time, as he and McDonnell made separate, back-to-back trade missions to China, then India.