California and Texas are the largest and most populous states in the contiguous United States, contributing significantly to the country’s economy and cultural landscape. Their similarities, however, end here. Whether you’re considering a move, evaluating political climates, or simply curious, let’s break down every major aspect of living in these two powerhouse states, from economic strength and cost of living to education and lifestyle.
Economic Powerhouses: A Look at the Numbers
In terms of sheer economic size, California leads with a staggering GDP of $3.85 trillion, translating to around $99,000 per capita. Texas follows closely with a GDP of $2.56 trillion and $84,000 per capita. In fact, if California and Texas were independent countries, they’d both rank among the top 10 economies worldwide.
GDP Growth Trends (2019–2023)
While both states experienced a GDP decline in 2020 due to the global economic crisis brought on by COVID-19, each bounced back differently:
- California: 2021 saw a rapid growth rebound of 7.6%, but this was followed by slower growth rates of 0.7% in 2022 and 2.7% in 2023.
- Texas: Texas grew at a slower pace than California in 2021 but maintained steady growth rates of 2.7% and 5.7% in 2022 and 2023.
California’s economy is slightly more robust overall, but Texas’s resilience through steady growth makes it a formidable competitor.
Taxation: No Income Tax vs. High Income Tax
One of the biggest financial distinctions between California and Texas is taxation:
- Texas: Texas famously has no state income tax, which allows residents to keep a higher portion of their earnings.
- California: On the other hand, California has a progressive income tax rate, with the highest bracket reaching over 14%. For median earners, this translates to approximately $7,000 more in income tax compared to Texas.
Property Taxes and Housing Affordability
California’s property tax rates may be lower, but its high property values lead to overall higher housing costs. Median home values in Texas range between $200,000 and $300,000, whereas California’s average home price is around $750,000, and homes in cities like San Francisco average $1.25 million.
With the high cost of housing, it’s not surprising that Texas has seen significant migration, with people drawn to its more affordable housing market.
Cost of Living: California vs. Texas
The cost of living differs greatly between the two states:
- California: Living costs are around 50% higher than the national average, with cities like San Francisco seeing costs soar to 86% over the national average.
- Texas: Even in Texas’s largest cities, the cost of living hovers around just 10% above the national average.
For those seeking an affordable lifestyle with economic opportunity, Texas is often the preferred choice.
Government Spending: Social Services and Education
Both states prioritize different aspects of government spending, which affects residents’ experiences:
- California: With government spending around $16,000 per resident, California places a strong emphasis on social services, with nearly a third of residents enrolled in Medicaid.
- Texas: Spending around $10,000 per resident, Texas prioritizes education, dedicating a higher budget proportionally, even if it falls short in total spending compared to California.
Education: Public Schools and Higher Education
Both California and Texas have large, diverse school systems. But differences in state spending and student-to-teacher ratios create distinct educational environments:
- K-12 Education: California spends close to the national average of $13,000 per student, while Texas spends only around $10,000. California’s average K-12 teacher salary is significantly higher at $72,000 compared to Texas’s $51,000.
- Student-to-Teacher Ratios: With an average of 23 students per teacher in California compared to 15 in Texas, overcrowding in California classrooms may be a factor in the state’s lower high school graduation rates (85% vs. Texas’s 90%).
- Higher Education: California shines in higher education, with 17 universities ranked in the top 100, including Stanford University. Texas has five universities in the top 100, with Rice University in Austin ranking highest.
Lifestyle and Recreation: From National Parks to Diverse Cultures
California’s Outdoors and Cultural Offerings
With nine national parks—the highest of any state—California is ideal for nature lovers. The state’s Mediterranean climate and varied geography allow residents to explore beaches, mountains, and deserts all within a day’s drive. It’s also a cultural hotspot, with diverse food and entertainment scenes, particularly in cities like Los Angeles, where international cuisine and fusion foods thrive.
Texas’s Diversity and Unique Culture
Texas boasts rich natural diversity, from the Gulf Coast’s beaches to the deserts of the southwest. Its cultural scene mixes historic Texan traditions with the modern influences of its rapidly growing cities, offering a variety of outdoor and cultural experiences, such as vibrant festivals and one of the best barbeque scenes in the country.
Employment Opportunities: Tech, Energy, and Beyond
California’s Economic Giants
California remains the tech capital of the United States, with Silicon Valley leading in high-tech innovation and job creation. Large cities like Los Angeles also drive demand in retail, healthcare, and social services, making California a great place for professionals in these fields.
Texas’s Growing Economy
Texas’s economy is dominated by the energy sector, with oil and gas being major employers. In recent years, the tech sector has also grown significantly, with companies like Tesla, Oracle, and HP moving their headquarters from California to Texas. This shift reflects Texas’s lower real estate costs and more business-friendly environment.
Both states have similar unemployment rates, with Texas at 4% and California at 5%, showing competitive job markets in both locations.
Infrastructure and Transportation
California and Texas each allocate significant budgets to infrastructure and transport, but the quality of the systems varies:
- California: With a larger state budget of $44 billion for transportation, California has prioritized sustainable policies, reducing per capita gas use by 10% since 2007.
- Texas: Texas spends around $30 billion annually on infrastructure, prioritizing highway spending to accommodate its vast land area.
Both states have major airports and ports that connect them internationally, but Texas’s central location makes it a critical U.S. hub for both passenger and freight transportation.
Political Landscape: Liberal California vs. Conservative Texas
California has been a Democratic stronghold since 2011, leading the way in progressive policies like climate action, LGBTQ+ rights, and healthcare reforms. With a largely urban population, the state leans left politically, reflecting the priorities of its diverse, city-dwelling residents.
Texas has been a Republican stronghold since 2003, with a large rural population that contributes to its conservative leanings. However, the state’s growing urban centers and incoming migrants from more liberal states have created a politically mixed environment, with around 90 counties closely split between Democrats and Republicans. This influx may signal a shift in Texas’s political future.
Population Dynamics: Why People Are Moving
California remains the most populous U.S. state with an estimated 39 million residents, but its population has declined recently, dropping by half a million people since 2020. In contrast, Texas has seen a boom, growing from 27 million in 2015 to over 30 million in 2024. The high cost of living and real estate in California has driven many to Texas, which offers affordable housing and a lower cost of living.
In 2021, nearly 110,000 people moved from California to Texas, representing the largest state-to-state migration in the U.S. The population shifts have begun to impact each state’s political and cultural landscape, with Texas’s demographics becoming increasingly diverse.
Final Verdict: California or Texas?
Ultimately, the decision between California and Texas comes down to lifestyle and personal priorities. California offers higher wages, diverse natural and cultural resources, and a high quality of life in urban areas—albeit at a high cost. Texas, on the other hand, provides affordable living with a booming job market, especially for newcomers seeking real estate and career opportunities. Both states wield economic and cultural influence, and their appeal may vary based on individual values, political leanings, and career aspirations.
Frequently Asked Questions (FAQ)
Is Texas cheaper to live in than California?
Yes, Texas has a lower overall cost of living, with affordable housing and no state income tax, making it more attractive for people seeking to save on everyday expenses.
Which state has better job opportunities?
Both states offer ample job opportunities, but they specialize in different industries. California is a tech and entertainment hub, while Texas is prominent in energy, manufacturing, and a growing tech sector.
How do the education systems compare between California and Texas?
Texas has a slight edge in K-12 education quality, with lower student-to-teacher ratios. California, however, excels in higher education, with more top-ranked universities than Texas.
Why are people leaving California for Texas?
California’s high cost of living, expensive real estate, and high taxes have prompted many residents to move to Texas, which offers more affordable housing, no income tax, and job growth.
Is California more liberal than Texas?
Yes, California is known for its liberal policies and is a Democrat stronghold, while Texas is a Republican-leaning state, though demographic changes may influence future political shifts.
