Jobs, Budget Deficits Define State-Level Races
By Pamela M. Prah, Staff Writer
Control of Congress is the main attraction in tomorrow's elections, but voters also will choose a huge new crop of leaders to try and navigate their states beyond the current fragile recovery by keeping campaign promises to create jobs and spend tax dollars more wisely. Also on tap are scores of ballot measures that could drastically change the way states spend their money.
Heading into Election Day, a dozen governors' races and battles for control of state legislative chambers are still too close to call, but if the polls are right, President Obama's party will lose ground. The question remains how much. Democrats currently hold 26 of the nation's 50 governorships. After tomorrow, Republicans could hold close to 30. And it's likely that a majority of the nation's governors will be new — a rare event in modern political history.
The governors and legislators whom voters elect Nov. 2 will be in a position to make dramatic changes politically and economically. Most of them will be involved in drawing new congressional and legislative district lines in 2011. The party that controls that process in a given state can draw maps to help its electoral chances — both at the state level and in the U.S. House of Representatives — for a decade to come.
The 37 governors and 6,000-plus state legislators that voters choose will have an opportunity to deliver on their varying ideas to jumpstart local economies. But the winners are going to need all the help they can get when they take office in January. Even if the economy suddenly surges, most states will face millions, or more commonly billions, of dollars of deficits in fiscal 2012 and will have to balance budgets largely without federal stimulus money.
Looking to New Jersey
Many Republican gubernatorial candidates are taking a cue from New Jersey Governor Chris Christie, the new rock star of the GOP. Elected in 2009, Christie promised to cut spending, fight tax increases and tackle the state's deficit problems, and did so in dramatic fashion. He sliced away $2.2 billion in state spending and insisted unions help reduce an estimated $46 billion in unfunded pension liabilities. "I want to be the Chris Christie of Connecticut," GOP gubernatorial candidate Tom Foley said during a recent campaign stop, with Christie at his side.
Some Republicans also are following Christie's lead by questioning the need for expensive transportation projects. Last month, Christie cancelled a project already underway to build a passenger rail tunnel under the Hudson River to improve service between New Jersey and New York City. In Massachusetts, Republican Charlie Baker says he wants to put the brakes on a project to link Boston to cities on the state's south coast with commuter rail. Republican candidates for governor in California, Florida, Ohio and Wisconsin have questioned plans to build high-speed rail in those states with federal stimulus money.
Pressed by Tea Party activists and voters' concerns about growing deficits and debt, Republican candidates all over the country have received cheers on the campaign trail for promising not to raise taxes and to bring spending under control. Many Democrats are making the same pledge, including some in states with the highest looming deficits. Among Democrats vowing not to increase taxes is Andrew Cuomo in New York, which faces a $7.5 billion gap. In California, which experts say faces deficits of $20 billion every year through 2015, Democratic candidate Jerry Brown says he is against tax increases unless they're approved by the people.
Like Christie, candidates of both parties are vowing to push through changes to state employee pension systems in a bid to save money. GOP candidates for governor in California, Minnesota, Illinois, Oregon, New York, Rhode Island, Maryland and Nevada have all embraced a change from defined benefits, with their promise of a guaranteed monthly retirement check, to defined contributions, in which workers pay into a non-guaranteed savings account that they draw from upon retiring.
Some Democratic candidates who typically get support from public employee unions also are calling for pension changes. New York's Cuomo and Brown in California want to cut benefits for new hires and increase contributions for current and future workers, while Oregon's John Kitzhaber wants a 401 (k)- style plan for future workers.
Candidates of both parties likewise have pledged to use the tax system to help create jobs. In Rhode Island, Democrat Frank Caprio wants to give a $1,000 tax credit to any local business that helps to bring in an out-of-state company and a $10,000 tax credit the two firms would share if the new business creates more than 20 jobs. In Illinois, Republican Bill Brady has pitched a two-year $3,750 "jumpstart tax credit" for every new job a business creates. In Florida, Democrat Alex Sink wants to tie corporate income tax credits to evidence that the companies are actually creating jobs.
Others promise to lure jobs to their states by streamlining regulations and privatizing some state-run departments. Republican Terry Branstad in Iowa, for example, has regularly praised the privatization efforts of Indiana Governor Mitch Daniels and wants to follow his lead by eliminating the state's business recruitment agency and replacing it with a public-private commission. Republican Chris Dudley in Oregon wants not only to privatize liquor sales but lead a "government-wide drive to privatize state services where possible." GOP gubernatorial candidates in Connecticut, Ohio and Nevada likewise have touted privatization.
Two candidates stand out from the pack by insisting that the only way their state will have enough money to pay its bills and provide key services is to raise taxes. In Rhode Island, Republican-turned-independent Lincoln Chafee wants to put a 1-percent sales tax on items that are currently exempt from the state's 7- percent sales tax, including groceries. And in Minnesota, Democratic nominee Mark Dayton wants to raise income taxes on individuals making $130,000 or more and couples making $150,000 or more, to help plug the nearly $6 billion deficit the state is facing over the next two years.
Money on the ballot
When it comes to this year's 155 ballot measures around the country, taxes and budgets, not social issues, are predominant. For the first time in more than a decade, gay marriage is absent from any statewide ballot and the only abortion measure is in Colorado, where voters will decide whether to amend the state constitution to define "personhood" as beginning at conception.
But the stakes involved in some of the fiscally oriented measures are huge. One of the most watched is in Washington State, where voters will decide whether to create a state income tax for high wage earners. Massachusetts will decide whether to roll back a sales tax increase that lawmakers used to balance the budget. California and Colorado likewise will take up tax questions that could dramatically expand or shrink the foundations on which future budgets will be built.
Much is at stake on the spending side as well. In Arizona, voters could blow a $450 million hole in the state's current budget if they reject two measures to allow the transfer of funds. In Florida, voters will decide whether to save billions of dollars by relaxing limits on school class sizes.