Fleeing the 'blue model'

Tennessee's governors and state legislators over the last 10 years have made a deliberate decision to operate the state in a manner that encourages the growth of the economy through the expansion of business, an influx of residents whose money moves in our state and holding government expenses in check.

The state's standards of operation have yielded an unemployment rating lower than the national average, a tax status that is deemed "business-friendly," and a government that serves its citizenry with an eye toward limited spending and budgets.

In contrast, many state and local governments of decades past have tended to operate within a model that was supported and written about by Dr. John Kenneth Galbraith, a Keynesian economist who served in the administrations of Franklin D. Roosevelt, Harry Truman, John Kennedy and Lyndon Johnson. This model of operation theorized that a powerful government, strong unions and large corporations would exert "countervailing power" and were the essential ingredients to a successful, fair economy.

That liberal "blue model" has been accompanied by heavy taxation and a "social dividend" in which government directs benefits to its employees and spending in the community it serves that exceed the role of government: longer vacations, rich pensions and health care, civil servant protections with little responsiveness to change, subsidized entertainment and countless other government interventions. Those things offer a unique advantage for some, not all.

How have states fared that continue operating using the blue model?

New York now boasts the largest exodus from any state between 2000 and 2010 with 3.4 million residents leaving, according to a migration calculator created by the Tax Foundation, a non-partisan tax research organization. Escaping residents took with them $45.6 billion in income to influence the economies of other states.

Whether it's New York's personal income tax, the $4.35-per-pack cigarette tax, 49 cents-per-gallon gasoline tax or its estate tax, the Empire State's oppressive environment of taxing the producers and spending for government is driving out residents.

The same data showed California to have a trend that mirrored New York, with 1.2 million residents fleeing the Golden State and pulling out almost $146 million in revenue, ranking second only to New York. The study shows that California's tax climate includes "more onerous taxes and regulations" that serve as an incentive to pack up, according to theamericaninterest.com.

During that same window of 10 years, Tennessee gained 105,548 new residents that brought with them $6.1 million into our economy, figures show.

The paradigm is shifting out of necessity and survival.

A California city provides just one example among several nationwide dealing with failed policies of the past. Vallejo has disposed of big salaries and benefits that comprised 80 percent of the city's budget and significantly reduced costs over four years by addressing efficient solutions in its new model of government that were previously ignored.

The financial squeeze on all governments will produce innovation, new efficiencies and, hopefully, drive into extinction the blue model of big, expensive government.

States and cities with true leaders who are skilled in understanding economic drivers will succeed. Others will lose citizens and their revenues due to blue-model flight.