San Antonio Mayor Julian Castro, 35, is a true rising star. The youngest mayor of a Top 50 American city, the subject of a fawning New York Times Magazine profile -- "The Post-Hispanic Hispanic Politician" -- and the recent recipient of a light dusting on The Colbert Report, Castro is one of the nation's most promising young Democrats -- even more so since he's cutting his teeth in the Republican-dominated Lone Star State.
During a recent trip to San Antonio, I spoke with Mayor Castro for half an hour about San Antonio's remarkably resilient economy, the Arizona immigration law, the stimulus, and the state of Texas. Here is an edited transcript:
There's a recession going on out there, but San Antonio is weathering it beautifully. Whether you look at jobs or home prices, your city is near the top of so many positive metrics. Why?
I think three sectors underpin the resilience of San Antonio. The first is the health care and the bio sciences, which have a $16 billion impact on the local economy. The second is education. There are about 100,000 students enrolled here, more than San Diego, Austin, or Dallas. Because we have such a young population, the education sector is not only business, but big business. The third is government investment. We still have several military installations. And then you have the traditional hospitality that SA has offered since the 1968 "Hemisfair."
Texas didn't experience quite the same real estate bubble as other states. Why not?
Several of the reasons are cultural.The banking practices in Texas since the Savings and Loan blowout of the 1980s have been a little bit more conservative, more cautious, than around the nation. Another thing is the tax scheme in Texas is heavily dependent on property taxes and discourages [real estate appreciation] more than a state that relies on sales taxes primarily -- or California with Prop 13, where taxes on property are cordoned off.
The other side of that coin is that because you have a more traditional approach to investment in Texas, there is less venture capital. Folks with capital tend to invest more in oil and gas and traditional sorts of investments rather than [real estate].
In the last year, CEO Magazine and CNBC named Texas the best place for business. We hear a lot about your low-tax, low-regulation environment. What else makes Texas so popular with business?
We've got lots of affordable land, for one. In the last few decades we've secured much more water in the southwest. That's been a fundamental issue. The other advantage is a very young population, a strong labor force. The wage level here is lower. Unions are not that strong compared to a lot of other states. A constant supply of labor feeds the hospitality industry.