The Elections That Really Matter This Fall

Bruce Katz
Bruce Katz Founding Director of the Nowak Metro Finance Lab - Drexel University

October 10, 2006

Amid all the horse-race hoopla over which party will win this November’s congressional elections—and the implications for the Bush administration and the 2008 presidential race—an equally, if not more, important feature of this fall’s elections are the 36 gubernatorial races in states where four-fifths of Americans live.

Politically, these contests are much more competitive than most House or Senate races, and the winners can help swing their states toward their party’s presidential candidate in 2008. More critically, in this era of polarization ad gridlock at the federal level, states are in the vanguard of policy experimentation, breaking with Washington’s myopia and conventional wisdom to craft policies that creatively and nimbly respond to America’s 21st century challenges.

Talented, energetic and pragmatic governors of both parties—working with state legislators—are giving new truth to the old adage that states are America’s true laboratories for reform, even as they face severe fiscal pressures.

While Congress and the Bush administration cut taxes and raise spending, adding to our $8.4 trillion debt, many states have demonstrated fiscal responsibility by both balancing their budgets and expanding their investments in America’s future, unafraid to increase taxes if necessary. As Congress all too often avoids our nation’s real business by posturing about flag-burning and same-sex marriage, states are fervently engaged in the marketplace of good ideas as both suppliers and consumers.

While fiscal responsibility and improving services have not always meant raising taxes, in Virginia, Gov. Mark Warner pushed through a controversial tax increase to invest $1.5 billion to help local school districts meet state standards in English, science, math and history.

While federal funding for basic science shrivels up, Californians, led by Gov. Arnold Schwarzenegger and state Treasurer Phil Angelides, recently approved a referendum to invest $3 billion in stem-cell research, creating the California Institute for Regenerative Medicine. And in Iowa, Gov. Tom Vilsack got state agencies to sign “charter” agreements in which they would be given greater flexibility in exchange for delivering better services at lower cost.

While Washington looks the other way at growing inequality and diminishing social mobility, governors are also striving toward a more inclusive society. As the federal minimum wage erodes to its lowest level in constant dollars in 50 years, 18 states now have higher limits, with Washington state’s $7.50 hourly wage nearly 50 percent higher than federal law. In Massachusetts, Gov. Mitt Romney signed a much-publicized bill requiring—and, when necessary, paying for—all residents to have health-care coverage. Meanwhile, Pennsylvania Gov. Ed Rendell’s “Job Ready PA” will leverage $2 billion of workforce-development and education funds to ensure a higher-skilled labor force. And Gov. Mike Easley made North Carolina the first of more than 30 states to bar lenders and mortgage brokers from making predatory, high-cost loans to low-income borrowers.

Despite belated Washington rhetoric about America’s addiction to oil, its need to respond to climate change, and the affordability of housing, governors are forging a path toward a sustainable, livable future. Notably, eight Northeastern governors, led by New York Gov. George Pataki, agreed to implement the Regional Greenhouse Gas Initiative, a market-based plan to cap and trade carbon emissions from power plants beginning in 2009. Likewise, Washington, Gov. Christine Gregorie won passage of, and successfully defended, a 9.5-cent gas tax hike to fund needed transportation reinvestments. And, while spearheading other housing-related initiatives, Gov. Rod Blagojevich secured passage of a law mandating an annual state-level comprehensive housing plan to create and preserve affordable housing for the next generation of Illinois’s residents.

Taken together, these initiatives create a different vision of government’s mission than ones articulated in Washington. It is a vision of “high-road” economic growth, in which government investments in higher education, research and development, and worker training ensure America’s future competitiveness. It is a vision of inclusive growth, in which government helps to enable all Americans to share in the country’s prosperity by rewarding hard work with decent wages and opportunities for advancement. And it is a vision of sustainable growth, in which policies to promote city revitalization, public transit, better education and climate-change mitigation demonstrate stewardship of our country’s future. Federal inaction has not hindered federalism, and the phrase “United States,” until the late 19th century a plural noun, has not become an anachronism. More than any other nation, we remain a strong, resilient and robust federation of states that retain the ability to shape their own destiny.

Moreover, in our country, innovation and reform have a funny tendency to bubble up from states to the federal level, as welfare reform did in the 1990s and universal preschool in Oklahoma and Georgia may be doing today. Admittedly, not every product of these “laboratories of democracy” is a good one—but when they prove successful, state-level policies often become federal policies, just as the governors of today represent the “farm team” for tomorrow’s presidents. Therefore, we would all be wise to pay attention to which governors voters choose on Nov. 7, for they may plant the seeds of the federal policy agenda for 2008 and beyond.