By Dr. Robert McClure and Will Swaim
November, 28, 2023
Supreme Court Justice Louis Brandeis coined the now-famous phrase describing the individual United States as “laboratories of democracy.” Indeed, the American states are a hodgepodge of contrasting ideologies, policies and cultures that produce disparate impacts on our qualities of life.
Florida and California are perhaps the two most noteworthy and polarizing examples of this, in large part because these two states often drive change on the left (California) and right (Florida) of the political spectrum as the rest of the country looks on.
It is notable, then, that the two chief executives from these two states will be debating one another in Georgia on Fox News on Nov. 30 — a debate widely expected to showcase their contrast in leadership styles, their policy positions, and the economic health and well-being of their respective states.
The differences between Governors Ron DeSantis (R) of Florida and Gavin Newsom (D) of California have not only shaped political trends, but also offered valuable insights into what works and what does not. The contrasts could not be more stark.
The popularity of low taxes, economic liberty and less government in Florida has resulted in the expansion of prosperity and opportunity across the board. It’s hard to argue with Florida’s model, which over the past quarter century has made the state the most popular destination for political refugees fleeing states that prioritize government regulation and bureaucracy — states like California.
In 2022, Florida ranked first in the nation for net inward-migration, with over a quarter million more people relocating to the state than leaving it. In contrast, California experienced more out-migration than any other state in the country, with a quarter million more residents leaving than coming — in many cases, leaving for the Sunshine State.
Pull back the curtain on these two states with similar demographics but very different governing philosophies, and you can see why:
No State Income Tax: Florida is one of nine states without an income tax. In contrast, California’s high state income tax rates — deemed second-worst in the nation by the Tax Foundation — take a significant portion of its residents’ earnings, discouraging economic growth and investment. The high rates aren’t just a problem for rich people, either. A California couple earning more than a combined $137,000 this year will pay a marginal income tax rate at or above 9.3 percent — higher than what millionaires pay in 44 of the 49 other states.
Cost of Living: That couple making a mere $137,000 income will also be hard-pressed to find an affordable place to live in California. Because of its onerous regulatory environment, the median cost of a home there is about twice that of a home in Florida. Moreover, draconian taxes and environmental standards make California gas prices on average $2 more per gallon.
Since 2007, California’s homeless population has grown by 23 percent, whereas Florida’s homeless population dropped dramatically — by 46 percent in the same period. Since Newsom took office, California has spent almost $20 billion to reduce homelessness, only to see it rise by nearly 25 percent.
Education Choice: Newsom’s restrictions on charter schools in California have left parents with little hope, strengthening the influence of teachers’ unions over parents’ choices and making alternatives to the government schools accessible only to the rich. It is noteworthy that Gavin Newsom sends his own children to a private school — a school that remained opened during his lockdown on public schools.
Florida, under DeSantis, has taken a wholly different approach, expanding school choice universally, allowing low-income and middle-class families to choose the best education for their children. The results are visible in superior learning outcomes, with Florida consistently outperforming California in education rankings.
Economic Climate: The 2023 State Business Tax Climate Index ranks Florida fourth in the nation, while California lags far behind in 48th place. With respect to direct growth, in the first quarter of 2023, Florida experienced a 3.5 percent GDP growth and an annual job growth rate twice that of California. In addition, Florida ranks in the top two states for starting a new business. California, once known as the natural home of entrepreneurship, now ranks last in the country.
Efficient Government: Florida’s 2023-24 budget is $5,100 per capita ($117 billion), whereas California’s spending is roughly twice that, at $11,400 per capita ($310 billion). California’s state pension program is one of the worst-run in the country, with a total unfunded liability of $245 billion, dwarfing Florida’s $39.5 billion.
Right-to-Work Protections: Florida’s constitution makes it a right-to-work state, guaranteeing that employees have the liberty to decide for themselves whether they wish to pay union fees. In stark contrast, California mandates union participation for private employees, and as a consequence subjects them to intimidation and coercion by union bosses in the workplace.
It didn’t have to be this way for the Golden State. California, once the envy of the nation, possesses abundant natural resources and an economy larger than most foreign countries.
Newsom has an opportunity in the upcoming debate to learn from one of the other “laboratories of democracy” where things are going well, and to take positive steps toward reining in his state’s bloated government, unleashing the power of private enterprise and American ingenuity.
Only then will California ever be able to bring back its past glory.
Robert McClure is president and CEO of the James Madison Institute in Tallahassee. Will Swaim is president of the California Policy Center in Tustin, Calif.