World News

Fauci Says U.S. Could See 100,000 New Cases a Day If No Change

New cases of Covid-19 could rise to 100,000 a day if behaviors don’t change, infectious-disease expert Anthony Fauci told a Senate panel Tuesday.

Several southern and western states are seeing surging new case numbers, prompting some to put reopening plans on hold.

“The numbers speak for themselves. I’m very concerned. I’m not satisfied with what’s going on because we’re going in the wrong direction,” Fauci, the director of the National Institute of Allergy and Infectious Diseases, said. “Clearly we are not in total control right now.”

Fauci said he wouldn’t be surprised to see new cases rise by 100,000 a day if recent surges don’t turn around, up from the current level of about 40,000 a day. As for the number of deaths, “it is going to be very disturbing, I guarantee you that,” he said.

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Fauci and other witnesses cited indoor gatherings as a major cause of recent spikes, singling out bars in particular. On Monday, Arizona paused operations at bars, gyms and movie theaters. Florida and Texas took steps to rein in bars on Friday, with Florida banning consumption of alcohol in bars and Texas closing them altogether. New York, New Jersey and Connecticut, former hot spots earlier in the pandemic, added 16 states to their self-quarantine orders for visitors.

Rising Hospitalizations

Robert Redfield, director of the Centers for Disease Control and Prevention, noted that in addition to the rise in new cases, hospitalizations are up in 12 states. The U.S. has recorded more than 2.6 million Covid-19 cases in total, with more than 126,000 deaths from the virus, according to data compiled by Johns Hopkins University.

Redfield and Fauci appeared before the Senate health committee for a hearing on reopening U.S. businesses and returning students to school. Fauci said schools may need to consider online classes or staggered schedules to safely bring students back. The CDC will issue guidance for schools on Tuesday.

Senator Lamar Alexander of Tennessee, chairman of the committee, opened the hearing with comments on wearing masks, saying the issue shouldn’t be as politicized as it’s become and that he’s asked President Donald Trump to wear a mask to set an example. Vice President Mike Pence appeared in Texas over the weekend in a mask and spoke about the value of covering your face in protecting against the virus.

Fauci told the panel, “I think we need to emphasize the responsibility we have as individuals and as part of a societal effort to end the epidemic and we all have to play a part in that.”

Vaccine Guidelines

Several drugmakers are racing to complete clinical trials of vaccine candidates, with some expecting to wrap up in months studies that under previous circumstances have tended to take years. The Food and Drug Administration laid out standards for approving an inoculation, saying any candidate would have to be at least 50% more effective than a placebo.

Fauci said that he’s “aspirationally hopeful” that a vaccine for Covid-19 will be ready in early 2021, though he cautioned that there’s no guarantee that a safe vaccine will be developed.

Some health experts have expressed worry that FDA will rush to approve a vaccine before enough is known about safety or efficacy but the agency sought to allay those fears with the guidance.

Read the FDA guidelines here

As for airlines, while the CDC hasn’t focused on their plans, American Airlines Group Inc.’s announcement on Friday that it would resume selling flights to capacity on July 1 rather than capping passengers to keep them socially distanced caused “substantial disappointment” among public health officials, Redfield said.

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World News

Texas Megachurch Defends Having Choir Of Over 100 Sing In Front Of Mike Pence

A Dallas evangelical church is standing by its decision to have an over 100-person choir sing without masks during a Sunday service attended by Vice President Mike Pence. 

The choir of First Baptist Dallas, a Southern Baptist megachurch led by President Donald Trump’s close evangelical ally Pastor Robert Jeffress, performed during “Celebrate Freedom Sunday,” a service attended by prominent politicians and hundreds of parishioners.

First Baptist Dallas took several steps to try to curb the spread of the virus during the service, encouraging people to wear masks, conducting temperature checks, providing hand sanitizing liquid, and encouraging vulnerable populations to stay home.

But the church also had its choir sing ― despite the fact that indoor choir rehearsals and performances have been linked to outbreaks of COVID-19. 

The choir wore masks while sitting down between songs, according to CNN. But during performances, members removed their masks and sang loudly and energetically while facing the audience. They performed the national anthem, the anthems of each branch of the military and several hymns. The indoor service lasted for about one and a half hours.

Asked about the decision to feature live choral singing on Sunday, church spokeswoman Abigail Miller insisted that “we have been very strategic and prudent in our approach.”

“We have taken steps to ensure that no one who has knowingly been exposed to COVID-19, demonstrated any symptoms, or tested positive has participated in our choir or orchestra for at least 14 days prior to our worship service,” Miller told HuffPost on Monday.

Miller also said that the church limited the capacity of the choir loft by 50%.

Over 2,000 people attended Sunday’s service, according to the Fort Worth Star-Telegram. While there were gaps between attendees in the first few rows, many other pews appear to be packed with congregants, according to video of the service. Most attendees were wearing masks, the Star-Telegram reported, although they generally didn’t practice social distancing.  

Studies have suggested that COVID-19 can spread through respiratory droplets in the air that can linger inside buildings. High-powered vocalizations ― such as what happens during loud talking or singing ― are particularly efficient in producing these tiny particles. 

There have been several reports of the novel coronavirus spreading during singing events. One super-spreader who attended a choir practice in Washington state in early March is suspected to have to spread the virus to 52 people, including three who were hospitalized and two who died. The Centers for Disease Control and Prevention published a report suggesting that transmission during the 2.5-hour choir practice was likely facilitated by the singers’ close proximity and “augmented by the act of singing.”

Other choir-linked outbreaks are suspected to have occurred in Britain, Germany and the Netherlands. 

The CDC initially recommended that churches consider suspending or at least decreasing the use of a choir and having congregants sing during services. The CDC asserted that “The act of singing may contribute to transmission of Covid-19, possibly through emission of aerosols.”

But late last month, the agency quietly removed that guidance from its website. According to The Washington Post, the White House requested that change.

Pence wore a mask for most of Sunday’s service, removing it to speak to the congregants.

During an appearance at the University of Texas Southwestern Medical Center later on Sunday, Pence encouraged people living in areas affected by coronavirus outbreaks to wear masks. 

“Where you can’t maintain social distancing, wearing a mask is just a good idea, especially young people,” Pence said.

Texas is backtracking on its reopening plans after the state experienced a surge in infection rates and hospitalizations due to COVID-19. The state had more than 6,000 new cases of the virus on June 27.

Dallas county is the second most impacted county in Texas, with close to 21,000 cases and over 350 deaths. Statewide, more than 2,400 people have died from COVID-19.

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America’s Shifting Covid-19 Epidemic in Five Charts

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The virus is on the move.

The curve that flattened out in April and May, albeit at a high level, is steepening again. Since the middle of June, a long plateau of newly recorded cases in the U.S. has begun to tilt upward.

Behind the trendline, the terrain of Covid-19 is shifting. Places that endured dark days in April have driven the number of cases down, while areas spared early on now face uncontrolled epidemics. On Monday in New York City, restaurants resumed sit-down service with outdoor-only seating. By Friday, Texas ordered taverns to close.

On Thursday, June 24, the U.S. reported a new record for daily Covid-19 cases, an increase of more than 40,000, exceeding the previous daily record in April, when New York morgues were overflowing. As measured by a rolling 7-day average to smooth out lumpy reports, the number of new Covid-19 cases in the U.S. increased daily between June 15 and June 24.

New cases are concentrated in rising hotspots in the U.S. south and west. Four states that saw their daily case numbers jump sharply in June — Arizona, California, Florida, and Texas — are home to about 3 in every 10 Americans. These states now account for about as many new Covid-19 cases as the rest of the country does.

Of course, cases only show up in data when they’re detected by testing, so the case counts here cannot measure the full scope of the virus’s spread. But they do not merely reflect more expansive testing. While testing has increased for the U.S. as a whole, the percentage of tests coming back positive is also rising, according to data from Johns Hopkins University. The virus is spreading faster than we are searching for it.

Horrifying U.S. Covid Curve Has a Simple Explanation: Max Nisen

That’s true in the Sun Belt states. In Arizona, more than 20% of tests now come back positive. Florida and Texas are both above 10%, while California’s test positivity rate has recently crept above the 5% threshold. Below that, states are thought be testing sufficiently, but 22 states are above it.

The combination of increased testing and rising number of cases in those four states is driving the national trend. These are places that didn’t see a huge spike in cases when much of the Northeast did. In some cases, they moved to re-open without meeting the official proposed criteria from the White House, which called for two-week downward trajectories of cases.

Remove those four states from the mix, and the national picture looks better. But there is still a recent upturn. While big states put up big case numbers, smaller states and less densely populated areas may face even more severe Covid-19 outbreaks for their size. While Houston battles the virus with world-class medical institutions, Lowndes County, Alabama, has a lone doctor to face a devastating outbreak. The plight of small towns and rural areas is harder to discern in a national trendline.

Many of the newer cases are among younger people, who tend to be less likely to suffer the worst outcomes from the virus. Treatment and understanding of the disease have improved since the first wave of Covid-19 swept the U.S. in the spring. If the newly infected skewed to a more resilient population — people catching the virus now at bars and parties rather than in nursing homes  — more of them may survive. Still, Covid-19 has killed young, otherwise healthy people, and this week the Centers for Disease Control and Prevention said pregnant women face higher risk for severe disease.


The news is not entirely bleak. In New York and other large states that endured the worst of America’s epidemic in the early weeks, numbers of new cases have dropped dramatically and stayed down, for now. The last time the average daily cases peaked, in the second week of April, four states accounted for more than half of new recorded cases: Massachusetts, New Jersey, New York, and Pennsylvania.

Looking only at the cases in those states shows a curve successfully flattened. Testing seems to be keeping up: Only about 1% of New Yorkers are testing positive. As life in the Northeast begins to orbit closer to normalcy, the question is whether those places will be able to stay ahead of the virus.

Areas where cases are spiking will have to find their way back to the other side of new peaks. As New Yorkers — and Italians, and Chinese, and a growing number of people around the world can attest — the journey can be grim. Orders in New York, New Jersey, and Connecticut for visitors arriving from hot spot states to quarantine are one sign of the challenge ahead: People move, and viruses move with them.

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World News

Texas Governor Halts Reopening With U.S. Nearing New Covid Peak

In this article

Texas Governor Greg Abbott halted the phased reopening of the state’s economy amid mounting criticism that his swift relaxation of lockdowns gave rise to a surge in Covid-19 cases and hospitalizations.

Businesses that were already permitted to open can continue to operate, but won’t be allowed to increase occupancy limits, according to a statement from the governor’s office. Abbott also suspended elective surgeries in the state’s biggest cities to free hospital space as Houston ran out of intensive-care beds.

The measures were the first indications that the Republican governor is willing to slow or scale back some the reopening he initiated eight weeks ago. Abbott was quick to follow the lead of President Donald Trump, encouraging businesses to operate despite the pandemic and overruling local efforts to enact stringent controls. But the contagion is increasingly dictating events.

“We reopened too early,” said Peter Hotez, dean of the National School of Tropical Medicine at Baylor College of Medicine. “Masks alone are not going to be adequate. We are going to have to prescribe some sort of social-distancing requirements.”

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The virus is racing across the U.S., extending its tentacles into places largely spared at the beginning of the outbreak three months ago. On Wednesday, America recorded 34,588 new Covid-19 cases, nearing the peak of 36,188 set April 24, when the virus was hammering New York. Now, Florida, Texas, California and Arizona account for almost half of all new cases.

Covid-19 deaths could rise by about 47% to 180,000 by October, according to the University of Washington’s Institute for Health Metrics and Evaluation.

Across a growing number of states, nonessential businesses such as bars and nightclubs -- many already teetering on the brink of insolvency -- must wait to reopen fully, if at all. North Carolina also paused its reopening this week, along with Louisiana and Kansas, signaling a growing sense of caution nationwide.

Still, many state governments have refrained from tightening restrictions again, as some public health experts say they must.

Abbott’s turnabout came as Houston’s Covid-19 outbreak accelerated at an exponential pace that will swamp the city’s medical infrastructure by the Independence Day holiday, according to Hotez.

Community Transmission

“The last thing we want to do as a state is go backwards and close down businesses,” Abbott said in his statement. “This temporary pause will help our state corral the spread until we can safely enter the next phase of opening our state for business.”

Even as Houston-area intensive-care wards filled to capacity, the worst is yet to come because of “the huge amount of transmission going on in our community,” Hotez said in an interview Thursday.

Current trends in Harris County, which includes Houston, indicate the caseload will triple or quadruple by mid-July, Hotez said, citing modeling by the Children’s Hospital of Philadelphia’s PolicyLab. Such a scenario would be “apocalyptic,” he said. “We can’t go there.”

Houston sprawls over hundreds of square miles of swampy southeast Texas, a landscape of freeways and shopping malls largely unhindered by zoning. It has a metropolitan area of about 7 million residents who compose one of the most diverse communities in the nation. And like other major cities in the state, its mainly Democratic leaders have found themselves at odds with Abbott and Republicans who have diluted urban power in politics.

U.S. Representative Veronica Escobar, an El Paso-area Democrat, said Thursday that Abbott “is far more interested in the economy than in human life.”

“You’ve got address the health crisis before you address the economic crisis,” she said. “If you ignore the health crisis, this is what you get.”

Football-Field Hospital

Abbott’s suspension of elective surgeries affects Harris, Dallas, Bexar and Travis counties, according to a statement from the governor’s office. Zimmer Biomet, Stryker and HCA Healthcare were among the worst performers in the S&P 500 Health Care Index Thursday morning after the news broke.

“These four counties have experienced significant increases in people being hospitalized due to Covid-19 and today’s action is a precautionary step to help ensure that the hospitals in these counties continue to have ample supply of available beds to treat Covid-19 patients,” Abbott said in the statement.

The Texas Medical Center -- a cluster of hospitals, research facilities and medical schools south of downtown Houston -- said the region’s intensive-care capacity had reached maximum capacity, a situation that will force medical authorities to convert other facilities to ad hoc Covid-19 wards. Harris County officials said they are prepared to reopen a field hospital at a professional football stadium if so-called surge capacity shows signs of strain.

The Medical Center can double its Covid-19 capabilities without overstretching staff or supply lines, Chief Executive Officer Bill McKeon said in an interview.

Youth Factor

”Obviously, when we see numbers that are growing exponentially, that’s always a concern to us,” McKeon said. “But remember, capacity is like a giant bathtub. Sooner or later, if water goes unchecked and the faucets are filling, then at some point any place, even the biggest medical city in the world, will overflow.”

The Medical Center is seeing more young patients admitted, which means they’re less likely to require intensive care, McKeon said. More concerning is that the trend probably indicates that young people aren’t practicing social distancing or masking up, whether because they’re socializing in crowded bars or have less ability to do so when they go to work, he said.

“If people do not change their behavior and really take this seriously across the entire community, then that will be a problem in the future,” McKeon said.

— With assistance by Billy House

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Covid-19 Gives Texas a Reality Check

The Texas Medical Center in Houston is the largest health care complex in the world, so vast it describes itself, accurately, as a “medical city.” About 106,000 people work there, traversing 50 million square feet of property. If TMC were a stand-alone business district, it would be the eighth largest in the U.S.

TMC isn’t a mere business district, however. It’s a conglomeration of more than 50 medical institutions, all nonprofits, including 21 hospitals, eight academic and research centers, four medical schools, seven nursing schools, three public health organizations, two pharmacy schools and a dental school. It is home to the world’s largest children’s hospital and the world’s largest cancer hospital. It treats eight million patients annually.

Covid-19 may soon overwhelm TMC.

So many Houston residents have been infected, and the case rate is growing so rapidly, all hospitals in the greater metropolitan area may run out of intensive-care unit beds as soon as today. If forced to tap what the industry calls “surge capacity,” the city’s hospitals estimate they’ll be filled to the brim in 10 days.

TMC, the goliath of this group, said that as of Tuesday, 97% of its 1,330 ICU beds were occupied (only 27% are currently filled by patients with Covid-19; 70% are non-Covid patients). TMC estimates it can handle a surge of about 373 more patients and, in extreme circumstances, another 504. If all those additional 877 patients are admitted, TMC’s maximum capacity of 2,207 ICU beds will be reached.

That might not take long. As of Tuesday, the Houston metropolitan area, home to about seven million people, had 32,154 confirmed Covid-19 cases, according to TMC, up from 24,885 one week ago, 14,846 a month ago, and 7,506 two months ago. Exponential growth is one of Covid-19’s calling cards.

Apart from the danger and uncertainty that clothe the coronavirus wherever it travels, two other realities are at work in these numbers.

First: Sprawling and impressive as it is, TMC has only 9,200 total hospital beds — 9,200, even though it treats eight million people a year. That reflects a broader problem with patient capacity in all U.S. hospitals. A combination of public policy, merger-happy industry dynamics that have brought about an unhealthy concentration of hospital networks, and decades of movement away from inpatient treatment has led to a nationwide shortage of hospital beds. Covid-19 has laid bare the vulnerabilities that are created when hospitals are run like assembly lines.

Second: TMC is populated by talented and brave professionals contending with what may become health care’s version of a massive tsunami — but one that might have been avoided, or at least mitigated once it swept in.

After all, New York and New Jersey, epic Covid-19 hotspots, have already demonstrated both the perils of responding too slowly and how to act properly and admirably once the threat is recognized. Yet Texas appears to have embraced magical thinking rather than practical combat tactics, leaving its 29 million residents, its economy and its health care networks exposed.

The proper response isn’t complicated. As TMC’s experts noted this week, social distancing, wearing a mask in public, washing hands regularly, and testing followed by isolation if needed all help slow the spread of Covid-19. Adopting such a regimen requires belief in science and medical expertise, however.

Enter Texas Governor Greg Abbott.

On March 19, when the state had 306 cases, Abbott issued a handful of relatively gentle executive orders to close schools and prohibit visits to nursing and retirement homes. Public gatherings of 10 or more people were also banned. Visits to bars, restaurants, gyms and the like were discouraged, but not forbidden. On March 26, Abbott ordered visitors to Texas from hot-spot states to be quarantined for two weeks. On April 17, with new Covid-19 cases in Texas plateauing at several hundred to a thousand a day — a rate that would hold until the end of May — Abbott created the Task Force to Open Texas to advise him on on how to “safely and strategically” reopen the state.

Businesses were gradually reopened through early May. On May 18, Abbott announced “Phase 2” of his plan, allowing more people to patronize restaurants, bars and other public venues. Meanwhile, total coronavirus cases in Texas had grown to 49,177 — from 2,792 on March 29.

On May 22, Abbott issued a “Be A Good Neighbor. Be a Good Texan” statement that encouraged — but didn’t require — residents to keep their distance, wear face masks and regularly wash their hands. On June 3, with daily Covid-19 cases spiking, a trend that has yet to abate, Abbott unveiled yet another aggressive reopening push, Phase III, which allowed all businesses to operate at 50% capacity.

“The people of Texas continue to prove that we can safely and responsibly open our state for business while containing Covid-19 and keeping our state safe,” Abbott said, even though the virus had not been contained. “As anticipated, the new positive cases that we are seeing are largely the result of isolated hot spots in nursing homes, jails and meat packing plants. Thanks to the effectiveness of our Surge Response Teams, we have the ability to contain those hot spots while opening up Texas for business.”

Abbott, a Republican, plowed ahead despite criticisms from Democrats and senior state officials that he was moving too fast and possibly jeopardizing public health.

On June 11, joined by baseball legend Nolan Ryan, Abbott rolled out another public service announcement. Titled “Don’t Be a Knucklehead,” it again encouraged, but didn’t mandate, social distancing and mask wearing. Four days later, with daily infections soaring, Abbott, along with Jaylon Smith of the Dallas Cowboys, encouraged Texans to “Wear a Mask On and Off the Field.” But Abbott told local authorities they couldn’t fine people for going maskless. He also resisted pleas from a large group of Texas mayors who wanted to make masks mandatory because they “could prove to be the most effective way to prevent the transmission of this disease.”

On June 16, with Texas reporting 93,569 cases of Covid-19, Abbott assured his constituents that “despite an uptick in positive cases, there continues to be abundant hospital capacity.” In a TV interview around the same time, he said there was “no real need to ratchet back the opening of businesses in the state” because “we have so many hospital beds available to anybody who gets ill.”

Reality has finally intervened. As of Wednesday, Texas had 125,921 reported cases of Covid-19. About 4,000 coronavirus patients are hospitalized, up from 3,000 several days ago. TMC and other hospitals are sagging beneath the weight of Covid-19.

And, suddenly, Abbott is speaking more plainly about the peril his state faces. “There is a massive outbreak of Covid-19 across the state of Texas,” he said in a local TV interview on Wednesday. “There are some regions in the state of Texas that are running tight on hospital capacity that may necessitate a localized strategy to make sure that hospital beds will be available.”

Abbott has company across the Sun Belt, with Florida, Arizona and California also experiencing surges of Covid-19. These aren’t explained by more ubiquitous testing, as some have suggested. Abbott recently tried to blame his state’s case rate on Texans in their 20s who aren’t “following these appropriate best health and safety practices.” But no data indicate that young Texans are behind the surge, and Abbott offered no evidence to substantiate his claim.

“Oh look — the guy who opened the state against all scientific and expert recommendation is now blaming us for his failures,” tweeted Kendall Scudder, a young Texan who is the host of a political podcast, Pod Bless Texas, after he heard Abbott’s remarks.

Abbott may soon run out of explanations for Texas’s corona-surge and the strains on institutions such as TMC. But it’s as obvious as the mask on my face that any accounting for how Texas arrived here during a pandemic already months in the making will have to include Abbott’s failure to lead.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

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World News

Texas Governor Says ‘Massive’ Virus Outbreak Sweeping the State

Texas is experiencing a “massive outbreak” as Covid-19 cases multiply, Governor Greg Abbott said on Wednesday as hospital systems in the state’s biggest cities strained to handle the influx of patients.

Texas posted its worst day so far for new cases, with a jump of 5,551 to 125,921, according to the state health department. The 4.6% one-day rise exceeded the 3.7% seven-day average. Hospitalizations climbed by 7.3% to 4,389.

“Our infrastructure is overwhelmed,” David Persse, Houston’s director of emergency medical services, said during a media briefing on Wednesday.

Earlier, Houston-area hospitals predicted they may exceed intensive-care capacity as soon as Thursday. Such an overflow will force hospitals to tap so-called surge capacity as patient numbers grow, according to Texas Medical Center data. At current rates of infection, sustainable surge capacity would be exhausted in another 10 days.

“There is a massive outbreak of COVID-19 across the state of Texas,” Abbott, who was among the most aggressive governors on re-opening, said during an interview with KFDA TV.

“The numbers are moving in the wrong direction,” Houston Mayor Sylvester Turner said during a media briefing.

Houston police and fire departments will step up monitoring of taverns and clubs to ensure compliance with occupancy limits and mask requirements.

“We want to really crack down on people who are not adhering to the rules,” Turner said. “We want to create a board of shame for those who are violating the rules.”

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Tesla to Texas — contrary to expectations, things are getting real

Chuck DeVore on Tesla potentially opening a factory in Texas

Reaction from former California Assemblyman Chuck DeVore, vice president of the Texas Public Policy Foundation.

When, on May 9, Tesla CEO Elon Musk registered his frustration, via Twitter, over California’s COVID restrictions making it impossible to build cars, he wrote, “Frankly, this is the final straw. Tesla will now move its HQ and future programs to Texas/Nevada immediately.” He then added, “Tesla is the last carmaker left in CA.”

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Musk’s threat to move to Texas was immediately discounted as empty, a mere hardball negotiation tactic with a state that has become notoriously anti-business. Unimpressed with the 10,000 jobs Tesla created in California, a State Assemblymember from San Diego quickly tweeted an expletive at Musk, in effect, telling him to go ahead and leave.


But now, contrary to expectations, things are getting real.

Tesla is said to be in negotiation with Travis County, Texas, home to the state capital, Austin, for property tax abatements on what is said to be up to a $25 billion investment bringing up to 30,000 jobs to the region. Since Texas collects most of its taxes through property taxes, abatements are often offered as an incentive for industry to locate in the state and can be worth millions.

The proposed Tesla gigafactory in Austin would build the company’s new Cybertruck electric pickup and serve as a second site to build the Model Y SUV.


Musk’s SpaceX already has a presence in Texas with its Rocket Development and Test Facility in McGregor.

The negotiations are serious enough that the United Autoworkers Union (UAW), and other allied unions, are pressuring the left-leaning Travis County Commissioners Court to make any tax abatements contingent on an agreement by Tesla to unionize its workforce. While Texas is a right-to-work state, localities can, in effect, override state law by withholding tax incentives unless a business agrees to certain terms favorable to big labor.


Tesla has been locked in a legal battle with the UAW over the union’s attempt to organize the manufacturer’s flagship auto plant in Fremont, California.

Any attempt by Travis County politicians to increase labor costs and rules in exchange for tax incentives to move to the Austin area may make Musk think twice—and then consider alternative sites in the more conservatively governed counties adjacent to Austin. Williamson, Hays and Caldwell Counties are prime candidates for their access to infrastructure, lower land costs, lower property taxes and affordable housing for workers.

Regardless of whether Tesla’s gigafactory is located in Austin or nearby, Tesla’s move to Texas would cement Austin’s status as America’s premier technology manufacturing region. The manufacturing jobs would likely pay about $35 an hour, or $65,000 to $75,000 a year while the supporting engineering, software and administrative jobs would pay far more.


Back in California, another threat against Tesla and the state’s last auto manufacturing plant is rising: the government’s COVID lockdowns have hammered the state budget, going from a surplus to a $54.3 billion shortfall, 46 percent higher than it was at the peak of the Great Recession.

This has led California lawmakers to consider a series of heavy tax increases to close the deficit. On top of that, voters will consider two ballot initiatives this November to hike property taxes on commercial properties up to $12.5 billion annually.

This would increase property taxes in California by 20 percent. This property tax hike, if approved, would significantly increase the tax burden for Tesla’s factory in Fremont and for other businesses, accelerating the business exodus out of the state.

Lastly, business analysts estimate that Telsa, and other firms, can save 32 percent of their operating costs by moving out of California, due to lower tax, land, labor, energy, and regulatory compliance costs. And, with news that Tesla’s Model 3 sales plunged 37 percent in April and May in California, their most important U.S. market, likely due to the government-imposed shutdown of manufacturing due to COVID-19, Musk is under even greater pressure to cut costs—a move to Texas may be just what the shareholders ordered.

Chuck DeVore is a vice president with the Texas Public Policy Foundation and served in the California State Assembly from 2004 to 2010.


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