'The Decade of San Antonio': An Interview With Mayor Julian Castro

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.

In your State of the City address, you made education a focus for your time as mayor. But you're in a state that traditionally ranks low in terms of achievement and money per elementary student. Does being pro-education in Texas have its challenges?

It's political, you know. This state is doing very, very well. The statistics are obvious. But it's sacrificing the future for the present, in some sense. We have the highest teen pregnancy rate of any state. We have one of the lowest student achievement rates. We have the highest number of children without health insurance. If we don't change those facts, Texas will not be at the top of the list for economic progress and job creation in 20 years or 30 years. The issue is, we need to strike a balance between attracting investment and meeting the labor needs of that investment.

Your governor famously railed against the stimulus. What do you think?

You know, the Riverwalk is the most visited site in Texas now for tourists and it was a WPA project under Roosevelt. People talk about stimulus money and what it can do. That's a perfect example of a good use for public investment, and it's still paying dividends for the city.

I think it made sense to infuse the national economy with resources. It has helped cities and counties create jobs and bridge a lack of resources at the local level. I'll give you an example. We got $10.2 million to hire new police officers, and those folks are out on the street right now making the streets safer. But I think the federal government should have worked closer with cities and localities.

What could the nation learn from San Antonio on immigration?

In San Antonio, you have a city that is 60 percent Hispanic and is one of the most successful cities in the United States today. There is this conversation about the Balkanization of America, whether people are going to assimilate and so forth. This city is a testament to how a community can get it right. I think the struggles amongst constituencies in the United States have already occurred in the San Antonio area over the centuries. People have learned to live together and work together and to respect each other.

Do you agree with the Arizona law?

Immigrants are not a net threat to the nation. They are part of the fabric of the nation, and hard workers that help propel local economies, as they have here. I've been proud of folks in this city who have said we need a different approach than the Arizona approach. We've taken a more adult and sober perspective to the issue than the sometimes strident perspective people have taken in other states.