Some farewell policy advice for Texas

Time to double-down on growth

Well folks, after a fun four weeks in Kerrville, Texas visiting my wife’s family, I am heading back to Washington, D.C. and the urban northeast that has been my home my entire life.

After spending more than my usual amount of time in Maine during the pandemic year, I wrote a post with some outside-the-box policy thoughts for Vacationland, and I thought I would wrap up Texas with something in a similar spirit. But while Maine is a left-leaning swing state where I feel comfortable just articulating my preferences, I think it would be a little dumb for me to write a post about Texas that’s just like “you guys should adopt normal liberal ideas about guns and abortion and have a progressive income tax.”

At the same time, Texas is a lot less solidly red than it used to be, and I think the trends driving that moderation are probably not going away. So what could creative Republicans do to solidify their grasp on the state through good policymaking rather than gerrymandering and efforts at vote suppression? Or, imagine this. George P. Bush is an ambitious, low-level statewide elected official here in Texas. The attorney general, Ken Paxton, is a corrupt far-rightist. Bush decided to abandon his family legacy and go all-in on Trumpism while seeking to challenge Paxton, only to have Trump endorse the incumbent anyway. Suppose instead of debasing himself, Bush had stood for his family legacy and ditched the GOP to run for governor as an independent, recognizing that Democrats don’t have a strong candidate and would likely vote for him. What could Mirror Universe Bush run on?

Or in other words, how could you plausibly make Texas better without just making it more generic?

One conventional liberal idea — expand Medicaid

I did want to kick off with one totally conventional liberal idea that I just think is a total no-brainer — Texas should expand Medicaid.

Recall that the Affordable Care Act established federal matching funds for Medicaid expansion that were so generous they basically amounted to free money — but also made expansion mandatory. Then Republicans sued, trying to get the whole law tossed out in court. Then Elena Kagan and John Roberts seem to have made a weird deal whereby Roberts would join the liberal justices in upholding the ACA individual mandate if Kagan would join the conservatives in ruling that Medicaid expansion couldn’t be mandatory. This was clever work on Roberts’ part because it did a lot to bolster the legitimacy of the court (and him personally) in the eyes of rank-and-file Democrats, but unfortunately, the Medicaid expansion was actually the substantively best aspect of the law.

Initially, it seemed like every state might expand Medicaid anyway because the financial terms are so generous. But in the midst of Tea Party mania, it became a thing where you’d be RINOed if you expanded Medicaid.

Here’s the thing, though. By 2021 we can see that a number of Republican governors did accept Medicaid expansion in states like Ohio and Michigan and Arizona and it’s going fine. We’ve also seen Democrats win elections in red states like Louisiana, Kansas, and Kentucky largely based on the Medicaid expansion issue. And Tennessee and Arkansas happened to have Democratic governors when the ACA was being implemented, so they expanded Medicaid and haven’t reversed course even under total Republican control. There are still 12 holdout states, of which Texas is the largest and most important, but Republicans clearly aren’t winning this fight — their position is super-unpopular and untenable. Whenever a non-Republican is elected governor of Texas, I promise you this issue will be at the center of the campaign — a thing that progressives are fired-up about that’s also popular with the voters and friendly to business interests.

Zoning preemption

Texas contains a bunch of large liberal cities that are very much part of the same cultural community as the large liberal cities in Democratic states.

So those cities tend to try to implement progressive policy ideas and then the state government tells them they can’t. There’s state preemption of city minimum wage laws, state preemption of paid sick leave laws, and even state preemption of something to do with how cities manage their trees. The point is the Texas state legislature does not believe in subsidiarity or deferring to local control, at least not when that control is exerted by Democratic-controlled jurisdictions.

This means Texas is a great candidate to implement a policy that sometimes codes in the discourse as left-wing but could also be seen as free-market lib-owning at its finest — state preemption of local authority over land use regulation.

Texas cities are “suburban” enough in their built form that you could do this as pure punishment of urban liberals without touching suburban counties. You’d simply have the legislature set land-use policy throughout Travis (Austin), Bexar (San Antonio), Harris (Houston), and Dallas (er … Dallas) counties and maybe throw in Tarrant (Fort Worth) just for fun. Many people have loosely heard that there is “no zoning” in Houston which is strictly true, but even there they have a lot of setbacks and parking regulations.

To see what a difference even not-zoning can make, check out the consequences of a limited reform in Houston that shrunk minimum lot sizes in certain neighborhoods, leading to dramatic before and after scenes. Sometimes you’d just see a particular parcel transformed.

And sometimes a whole neighborhood.

This should be legal everywhere within the target counties. And apartments should be legal too. There would be a transformative impact, especially on the very expensive Austin housing market. And you wouldn’t need to touch the people enjoying the suburban dream lifestyle in the surrounding counties.

Stop the gerrymandering

Because Dan Crenshaw annoys liberals on social media and also represents an epically absurd-looking House district, you often hear Democrats complain about the level of gerrymandering in Texas.

Something that gets talked about less is that during the 2018 Democratic wave year when Beto O’Rourke lost to Ted Cruz by three points, he actually carried a majority of districts in the Texas House of Representatives. In other words, Republicans drew a moderately D-leaning gerrymander in the lower house of the state legislature. Not out of the goodness of their hearts, but because Texas has seen both a lot of switching of vote-preference and also a lot of new people moving in. It was simply challenging for people sitting around in 2011 to accurately predict what the 2018 situation would look like. Democrats had high hopes based on inaccurate polling that they might be able to build on that result, narrowly win the Texas House in 2020, and block a partisan gerrymander in 2021. It didn’t work out, and now Republicans get to re-optimize based on new information.

Still, it’s objectively a little tricky. Should you assume that the Hispanic shift toward Trump in 2020 is a permanent change, or is that likely to swing back? What about the sharp shift away from Trump in favored quarter suburbs?

The point is this stuff is not an exact science. And a great high-minded reformist move would be to insist on a move to independent commissions or some other form of fair districting to ensure that a diverse and rapidly changing state has a responsive legislature.

Tax reform!

I’m not going to suggest that Texas implement a modest progressive income tax because it goes so much against their schtick and I think violates the whole spirit of the enterprise. What I would say instead is that if Texas is going to have a consumption-based tax system, they ought to have the best possible consumption-based tax system for maximum pro-growthness.

Right now among the states:

  • Texas has the 46th highest tax on distilled spirits.

  • Texas has the 32nd highest tax on beer.

  • Texas has the 44th highest tax on wine.

  • Texas has the 28th highest tax on cigarettes.

  • Texas has the 44th highest tax on gasoline.

But they’re 14th in sales taxes and 6th in property taxes. You can’t raise that much money through excise taxes on public health bads like booze, cigarettes, and gasoline. But Texas should try and aim to be number one on all that stuff and then cut the state’s relatively high general sales tax.

There are a million reasons that would never happen, especially since “guys driving gas-guzzling trucks as a lifestyle choice that has nothing to do with their actual job” is a big constituency here. My father-in-law, who in fact does need his gas-guzzling truck for work, would also be mad at me if this came to fruition. Nonetheless, the logic of the tax system is absolutely that it should be moved in that direction. The state would be healthier, it would have less traffic congestion, and it would be even more business-friendly and pro-growth in a general sense.

Fund scientific research

The National Institutes of Health and the National Science Foundation spend a lot of money on grants to scientific research in the United States. That’s great, though there are also a lot of questions about whether the specific way they do it is in fact the best way to fund science.

Meanwhile, the government of Australia also has grant programs to finance scientific research in Australia. The Science Foundation Ireland does this for Ireland. Texas has more people than Australia and a lot more people than Ireland. So why not a Texas science foundation to fund Texas-based scientific research that tries to use a whole different grant model from the federal one? The Fast Grants experiment that Tyler Cowen and Patrick Collison have been running is awesome, but I don’t think it’s necessarily a realistic model for how the public sector could work.

But the idea laid out in this Kelsey Piper article of just setting a floor and then allocating funding by lottery rather than wasting a lot of time and effort trying to make people compete for the “best” proposal makes a lot of sense to me. And since part of the whole point of that philosophy is its simplicity, it’s perfect for a state government. You’d need a pool of money and some administrative apparatus, but it could be much smaller and simpler than what the federal government does.

It might be a good idea to structure this as regional development policy, too. You could make institutions based in Austin, Dallas, and Houston ineligible so that the money goes to build up Texas’ slower-growing and less cosmopolitan cities — spreading the wealth around.

Lone Star High-Speed Rail

Texas’ main cities are close enough together that they’re suitable for linking by rail, and they are sufficiently fast-growing that there is reason to believe investment in additional infrastructure would be a good idea. There is nothing wrong with airplanes, but right now the airports in Dallas, Houston, and Austin all are undergoing expansion, and San Antonio recently completed one. There is just a lot of transportation demand in the state, demand is growing, and demand will grow even faster with land-use reform. That demand is spurring a lot of investment in roads and airport capacity, which is fine, but investment in rail capacity is also warranted.

Unfortunately, unlike in the northeast, the cities are not in a convenient straight line. But there actually is a good track route that links everywhere to everywhere on good timetables with minimum waste, as shown by Alon Levy. It’s just a bit odd-looking because it unintuitively does not directly link Austin to Dallas.

This gets you Houston to Dallas in 1:30 and Dallas to San Antonio in 1:45. That’s competitive with air travel and lets airports focus on serving the extensive demand to connect these cities to places further away. It also gives College Station great connections to everywhere and will help turn it into an additional major urban center.

Best of all, because this is all inside one state, you could do it outside the umbrella of the federal government and the disaster that is Amtrak. Bring some guys in from France or Korea or wherever who know what they’re doing and make something awesome.

Everything’s even bigger in Texas

The incredible scale of Texas is one of its most obviously striking and well-known features.

It’s also been governed now for about 25 straight years by a series of Republican Party governors who have fundamentally succeeded on their own terms — Texas is a very business-friendly, high-growth state that has plenty of problems but is delivering what the ruling regime claims to want to deliver. But a bit like rain on your wedding day, this rapid growth has led to urbanization, which has made the GOP’s hold on power more tenuous and has backed them into a paranoid politics of voting restrictions. Under the influence of Donald Trump, the state party has abandoned the pro-immigration policy framework upheld by George W. Bush and Rick Perry.

A less close-minded and partisan approach would be to say that all this population growth, both from abroad and from other parts of the country, has been good for Texas. The faster your population grows, the smaller the share of your tax base that has to be diverted to legacy pension costs and infrastructure depreciation, and the more you can dedicate current revenue to current services and infrastructure expansion. If you gave Texas the demographics of West Virginia, it wouldn’t be possible to sustain the low taxes without severely compromising the quality of services.

Texas should re-embrace the more optimistic political tradition of its recent past and double down on growth. Make the land-use changes that will keep pushing Texas’ leading cities forward. Make the infrastructure investments that will allow them to keep growing rapidly in size indefinitely. Make new investments in research that spread high-end job opportunities to other parts of the state. And make state government responsive to the preferences of its citizens rather than subordinating internal democracy to the imperatives of national Republican Party politics.