Later this week the new darlings of the political pundits, the Republican governors, will gather in New Orleans. Despite their popularity, they seem to defy ideological classification. Liberal commentators maintain that George W. Bush of Texas, George Pataki of New York and the other 30 Republican state CEOs are the ideal model for the GOP: social moderates without the sharp-edged, anti-government rhetoric of those “mean-spirited” congressional Republicans. Conservatives trumpet the GOP governors as Reaganite tax cutters, welfare reformers, school choice advocates and tight-fisted budgeteers.
Which side is right? Perhaps both.
There can be little doubt that in 1998 the governors advocated bloated pre-election budgets. Many Republican governors recommended 7, 8, and even 10 percent increases in expenditures — in an era of close to zero inflation. When recently asked about those prodigious budgets, Wisconsin’s Tommy Thompson admitted, “There is a new breed of activism among us.”
Back in January Republicans showcased spending initiatives for children’s programs, school construction, environmental clean-up, day care subsidies and job training. Whom does that sound suspiciously like? Bill Clinton, of course. Of $40 billion in state surpluses, about $8 billion was passed back to taxpayers, and the other $32 billion was either spent or dumped into a “rainy day” fund to be spent the next time it rains. The Wall Street Journal declared, “For Republican governors, spending isn’t a dirty word anymore.”
To truly appreciate the paradigm shift in state governments, it is important to keep in mind that many of today’s Republican governors replaced quite liberal, pro-tax and spend “progressive” Democrats.
But to call those governors big spenders is to denigrate their long-term accomplishments. Almost all of those governors have passed ambitious tax rate cuts. The trend started with John Engler in Michigan and Christine Todd Whitman of New Jersey, but then it spread to 28 other states at the speed of a rumor of a Monica Lewinsky scandal on the internet. To truly appreciate the paradigm shift in state governments, it is important to keep in mind that many of today’s Republican governors replaced quite liberal, pro-tax and spend “progressive” Democrats.
Consider the fiscal odyssey of three high-profile governors: John Rowland of Connecticut, Christine Todd Whitman of New Jersey and George Pataki of New York. In the early 1990s each vanquished the left’s tax and spend liberals: Lowell Weicker, Jim Florio and Mario Cuomo. Each preached the gospel of pro-growth, Reagan-style income tax cuts and old-fashioned fiscal belt-tightening. Each confounded the critics (and allies, as well) by delivering promised tax relief ahead of schedule. After Pataki’s first two budgets were enacted, New York’s budget shrank by $1 billion and New Yorkers’ tax bills had been slashed by $3 billion. Rowland cut taxes, froze the state workforce, enacted tough welfare-to-work requirements and converted a $500 million deficit into a four-year $1 billion surplus.
Or consider John Engler. In his first term Engler fired 5,000 state workers, eliminated the general welfare assistance program for 50,000 employable adults and cut taxes 16 times. The left pilloried him as the satan of Lansing. He was blamed in a truly ugly segment on ABC’s “Nightline” for people dying in the streets of Detroit. Now that Michigan has one of the strongest economies in the country and one of the lowest unemployment rates, and now that Engler has 60 percent approval ratings, the press praises him as a “compassionate conservative.”
These aren’t so much “compassionate” conservatives as smart ones. They experiment, innovate, and copy what works. Virginia’s George Allen and now Jim Gilmore have ended parole for violent offenders. Wisconsin’s Tommy Thompson and Minnesota’s Arne Carlson have been tireless crusaders for school choice. George W. Bush of Texas defeated the parasitic Texas trial lawyers and enacted tort reform that has cut legal costs by nearly one-quarter. Pataki and more than a dozen other GOP governors have implemented “tough love” welfare reforms that require work and impose time limits on aid. The result: a reduction of nearly 40 percent in welfare dependence.
Congressional Republicans should take note that most of the re-elected governors campaigned on promises of deeper tax cuts to come. Engler wants to lower the Michigan income tax from 4.3 to 3.8 percent. Oklahoma’s Frank Keating advocates cutting Oklahoma’s 7 percent income tax in half over the next seven years. Paul Celluci prevailed in Massachusetts, promising a 10 percent income tax rate cut. George W. Bush and his brother Jeb proclaimed in virtually every campaign speech that they would ease the tax burden over the next four years. Yes, the tax-cutting issue is still politically electrifying.
Of course, 1999 will be a pivotal year in defining who these GOP governors really are. The states have big budget surpluses this year. So the issue becomes, Which governors will spend the surpluses on Clintonite social programs? And which will return to their reformist, anti-big government, supply-side roots? The answer to that question may just determine who our next president is.