A week or so ago I noted an interesting inverse corrolation between an area's credit rating and growth rate:

Of the ten fastest growing states (9 red, 1 blue), seven are in the bottom third, credit-wise (two midling, one in the top third). Of the ten slowest-growing states (6 blue, 4 red), seven are in the top third, credit-wise (the remaining three midling).

Looking back at the city list that prompted the study, of the ten fastest growing cities on the list, seven were on the bottom ten of the credit list. All but two are found in the twelve fastest growing of the twenty. Three of the four cities that grew faster than 15% between 1990 and 2000 are #18, #19, and #20 (the other, Denver, is #12).

I commented that I had an idea of what might be behind it, but that it dovetailed a little too nicely with some pre-existing political beliefs.

I also asked for input and got some good theories, none of which I entirely disagreed with.

I think it's likely that there are two factors at work. The first (and a minor factor) has little bearing on ideology of politics: Moving is expensive. It's a time of your life where you're most likely to be strapped for cash. It's not unreasonable to be falling a bit behind on your bills during this period unless you have a bunch saved up. On top of that, people most likely to relocate to a "hot town" (Phoenix, Houston, etc.) are also most likely to be risktakers. People unlikely to have a bunch of money saved up. Newcomers are also more likely to be younger and less financially stable, taking a loss to get their first job and such.

But that's minor. Even if the fastest-growing top-20 city, less then 4% of the population are moving in a year. Not likely enough to account for the difference. Whatever could draw such a corrolation would probably have to be more systemic than that.

So what's the politically charged reason? Let me explain my thinking before I get in to it.

My first assumption is that there is a relatively equal distribution of fiscally smart and fiscally stupid people. There's no reason to believe that people who live in Phoenix are inherently dumber than those that live in Philadelphia. There's certainly no reason to believe that the smart people are hanging out in dead-end towns like Detroit rather than bustling metropolii like Denver and Dallas.

So then if people are budgeting in equally intelligent or unintelligent proportions, then what is happening to these budgets? It's either a decrease in income or an increase in expenses.

On the income side, layoffs would be the most likely possibility. Indeed, Houston may be in the list in part because of Enron fall-out. People had budgets set up for an Enron income and found themselves laid off, working for much less, and with hefty mortgages. But you'd have to expect San Francisco to be hit pretty hard after the dot-com bust and it hasn't been. There's also nothing particularly notable in Dallas, Phoenix, or Atlanta. Ublike Houston they didn't have Enron and unlike Frisco they didn't have a dot-com bubble.

And, generally speaking, layoffs are likely to be most frequent in places that have declining population.

So then you have to look at the expenses side. Since otherwise marginal people (that are staying afloat elsewhere) are going in to debt, you would have to assume it's an unavoidable expense. No particular reason to believe that Houston's and Atlanta's populations have a greater insatiable need for big-screen TVs and VCRs than Cleveland's.

Most of the budget variables are national. Gas prices are going up nation-wise, food prices are stable, and car prices go up or down on a more national level than local one. Medical care, maybe? Why would growing places need more of it than receding places?

So I was going over my own fiscal history to try to think of the last time that I was broadsided by something and a likely culprit came to me as clear as a single statistic:

• Between 2002 and 2003, my rent at a single apartment went up 43% over the course of 18 months.

Then something else popped in to my head:

• One of the hottest political issues in Texas right now are runaway property values and taxes.

One thing that is unmistakeably happening in "hot cities" like Austin or Phoenix is that property values are going through the roof.

For renters this means considerable rent jumps from lease to lease. While you can move around from apartment to apartment, the moving process alone can be very expensive. Apartment complexes know this and will often charge lease renewers more per month than people that new prospective new tenants. Beyond that, if all of the property values are going up together and they're not met with a wage increase, then you're in trouble no matter where you go.

For homeowners, this means considerable jumps in property taxes. Texas, of course, has no income taxes and would likely be even harder hit. Texas has the worst two cities of the twenty. While property-tax-inceases-via-appraisal-jumps may be smaller than rent jumps, the homeowner has less options because he's already bought the house.

Either way, you're feeling a pinch. You're incurring expenses that are impossible to take into account (you may budget in rent/property tax increases, but you have no way of knowing how much).

Except, as I mentioned, this theory is a bit too convenient. Of all the ways that citizens are taxed, property taxes are the only ones I harbor a moral objection to and this places a good deal of the blame on property taxes. But if anything else can explain the corrolation better than this, I don't know what it is.