Several items have caught my eye in recent weeks that reinforce the old dictum that states are the laboratories of democracy.
Under our system of government, states and individual localities may adopt different policy approaches on a host of issues. The lessons and success of those policies can offer valuable guidance to other lawmaking and regulatory authorities, including the federal government.
That point was made ably in the headline of a recent Wall Street Journal editorial: “A Tale of Two Oil States.” The piece contrasts the differing approaches taken by two energy-rich locales – Texas and California – to developing their abundant natural resources.
Oil production has skyrocketed in Texas in recent years, creating jobs and economic growth as a result. Meanwhile, California oil production has declined 21 percent since 2001, largely because of policy choices and litigation. The Journal’s look at the competing visions of how and whether to develop energy resources offers a lot of lessons about what makes for a vibrant state economy.
A similar comparison is being made between Pennsylvania and New York, neighboring states that are moving in opposite directions when it comes to producing energy from the Marcellus Shale. Pennsylvania has encouraged responsible shale energy production; New York, so far, has banned it.
The Syracuse Post-Sandard notes a new study by the Manhattan Institute showing that “allowing hydrofracking to proceed in New York would be an economic boom that would bring $8 billion of income to Upstate New Yorkers. … If New York lifts its moratorium on hydrofracking … income of residents in the 28 counties that lie above the gas-rich Marcellus Shale could rise by 15 percent. The report says Pennsylvania counties in which hydrofracking has occurred have grown faster than those without it.”
Finally, I spotted this article about the best and worst states in which to do business, according to a survey of American CEOs. The poll measured the sentiments of business leaders on issues like regulations, tax policies, workforce quality and infrastructure.
What I found curious are the two states that finished last in the rankings: California (50) and New York (49). The article notes that CEOs say California’s “poor ranking is the result of a perceived hostility to business, high state taxes and onerous regulations, all of which drive investment, companies and jobs to higher states.” Texas, by the way, was deemed the best state for business in the U.S.
Also of interest is the jump that Ohio took in the poll. The Buckeye State moved up 13 spots from its 2012 ranking, the most significant improvement of any state. Ohio’s newfound willingness to improve conditions for business and investment – particularly Utica Shale energy development – offers a lesson that policymakers in Washington and the other state capitals might be wise to consider.
