Are you wondering whether to pack up and move to Texas or California?
Each state has a distinctive appeal, but both have significant differences in terms of the economy, cost of living, quality of life, and more.
Because of these notable disparities, making the right choice might be difficult. Whether you're looking for a new job, better opportunities, or just a change of scenery, this blog will help you understand what each state has to offer.
Both California and Texas boast economies that are among the biggest in the world, making them economic powerhouses. However, California has a much larger GDP and population, while Texas has a lower unemployment rate and no state income.
Although agriculture is a major industry in both states, Texas is known for manufacturing and energy, while California is known for technology and entertainment. To add on, California has a higher cost of living than Texas, which can be an important factor to consider for companies and business people.
|Gross Domestic Product (GDP)
|Technology, Entertainment, Agriculture
|Energy, Manufacturing, Agriculture
|State Income Tax
|High (top marginal rate of 13.3%)
|Sales Tax Rate
|Cost of Living Index
Note: The figures in the above are based on recent data and are subject to change over time
Real Estate and Housing
The housing costs in California are much higher than in Texas. This is especially true for major cities with median home prices far above $1 million, such as San Francisco, San Diego, and Los Angeles. In contrast, the lower cost of living in Texas helps many buyers afford better and bigger housing.
Bestplaces.net reports that the median price of a home in Dallas, TX is $259,800, and $883,400 for a similar home in Los Angeles, CA. That's a difference of over $600,000 or 240% more expensive in Los Angeles. However, the property tax in Texas is higher at 1.80% compared to 0.76% in California.
Cost of Living
According to BestPlaces.net, the overall cost of living in California is around 52% higher than in Texas.
The following are factors to consider:
When it comes to eating out, foodies will discover Texas is less expensive than California. For example, a meal at a budget restaurant in Texas will cost $12, while the same in California would go for $15. Granted, this will depend on the city or town you're in, but on average, Texas is more affordable in this regard.
With an average price per gallon of around $4, gas prices in California are much higher compared to around $2.80 in Texas. Moreover, California charges more for vehicle registration. Additionally, a monthly pass for public transit typically costs about $80 in California and an average of $65 in Texas.
Unlike Texas which has no state income tax, the California income tax has ten tax brackets, with 13.30% as the maximum marginal income tax. In addition, Texas has a lower overall tax burden than California, and this makes it more affordable for many people. According to a 2022 survey by WalletHub, California had the country's 9th highest tax burden while Texas ranked 34th.
Child Care Aware of America 2020 report states that the average cost of center-based childcare in California was $16,542 while it was $8,759 in Texas. This means childcare costs in California are nearly twice as high as they are in Texas. However, it's important to note that childcare costs in each state vary significantly based on factors such as the age of the child, location, and type of childcare provider.
According to the U.S. Department of Health and Human Services (HHS), childcare costs shouldn't account for more than 7% of a family's income. The Economic Policy Institute estimates that the average cost of childcare for a household with two children in California is 27.2% of the median family income. This is higher than in Texas which is 18.2% of the median family income.
Quality of Childcare
According to the National Institute for Early Education Research (NIEER), California ranks 7th in the nation for pre-K quality standards, whereas Texas ranks 27th. Plus a higher proportion of licensed childcare providers are found in California, which may point to a more controlled and uniform childcare system.
Rich Natural Environment
The state of California is renowned for its diverse landscape which includes mountain ranges, rugged coasts, and dense forests. In comparison, Texas is known for its vast open plains, undulating hills, and dry deserts. Further, California has stricter environmental laws than Texas, which has made the state's air and water cleaner in many areas.
California is also a pioneer in the use of electric vehicles. According to a 2021 report by the California Air Resources Board, California had over 800,000 electric vehicles (EVs) on the road. In comparison, 54,000 EVs were sold in the Lone Star State in 2020, the second state in the nation when it comes to EV sales.
Both California and Texas are known for their sunny warm weather, but there are some variations in climate.
The state of California typically has cooler temperatures than Texas, especially along the coast. For example, the average high temperature in San Francisco is around 62° Fahrenheit, whereas the average high temperature in Los Angeles is about 75° Fahrenheit. In contrast, summers in Texas are notoriously hot. For instance, temperatures in Houston hit highs of 90° Fahrenheit, while Dallas experiences highs of about 95° Fahrenheit.
Droughts have become common in California in recent years. Yet, some regions of the state (the northern coast) post high annual precipitation. On average, San Francisco will experience roughly 23 inches of rain annually. Texas has more erratic rainfall while some areas such as Houston are known for regular thunderstorms. On average, Houston receives 49 inches of rain per annum.
It's worth noting that both states have struggled with air quality issues in the past, with California often experiencing more severe concerns. Los Angeles, Fresno, and Bakersfield were among the worst cities in the U.S. for ozone pollution, according to the American Lung Association's 2021 "State of the Air" report. Meanwhile, Dallas, Houston, and Austin are the major Texas cities that struggle with air pollution, particularly in the summer.
Both California and Texas have much to offer, but there are notable variations between them in the cost of living, economy, and quality of life. The final decision on where to live will come down to your personal preferences and priorities. We hope this blog has helped inform your decision. If you're interested in learning more about the housing market in Texas or California, or maybe you're ready to move, call us today!Posted by NJeffu Mwaura on