Cover Story

Revenge of the over-regulated

"Revenge of the over-regulated" Continued...

Issue: "Race to the finish," Nov. 3, 2012

“Some of the help businesses need is for us to get the heck out of the way,” Pat McCrory, the Republican vying for the governorship of North Carolina, said at a Sept. 25 campaign stop in Alamance County. “We’re going to start looking at businesses as customers of government, not adversaries.”

Virginia Gov. Bob McDonnell’s track record is giving Republican challengers hope and ammunition. McDonnell assumed office in 2010 facing a $6 billion state budget deficit. He turned that deficit into a $404 million surplus in his first year. Focusing on government efficiency rather than tax increases, McDonnell helped Virginia’s state budget return to levels enjoyed before the current nationwide recession.

This summer Virginia posted its third straight budget surplus—$448.5 million this fiscal year—largely from the $319 million saved by state agencies operating below their budgeted levels. The previous fiscal year Virginia had a $544.8 million surplus. Unemployment in the state has fallen from 7.2 percent when McDonnell took office to 5.6 percent today.

With McDonnell serving as the chairman of the Republican Governors Association, campaigns around the country are retelling Virginia’s budget story. “For too long, elected officials from both parties have overpromised and overspent,” McDonnell says. “We are committed to a culture of fiscal responsibility and restraint in state government. We have made some very tough choices. We have reduced spending, not raised taxes, and focused government on its core functions.”

In Washington, the mood of the voters toward state government began to change in 2004 when it appeared that Republican Dino Rossi had broken the Democratic stranglehold on the governor’s office. Rossi won the initial automated count and recount, but Democrat Christine Gregoire became the winner after the Washington State Democratic Party paid for a second recount done by hand. Rossi lost that final recount by just 129 votes out of nearly 3 million votes cast.

Gregoire secured reelection in 2008—a year that saw disgruntled voters give Democrats control of the White House and greater power in Congress. But Washington voters kept edging closer toward fiscal conservatism on a state level: Voters in 2010 rejected by 30 percentage points a ballot proposal to impose a 5 percent tax on income over $200,000 and a 9 percent tax on income over $500,000.

Washington Democrats on this November’s ballot are counting on an Obama bounce, but McKenna, in winning nearly 60 percent of the vote during his reelection as attorney general, was the only candidate to outperform Obama statewide in 2008.

After taking 11 governorships away from Democrats in 2010, Republican governors lead 29 states. With the GOP competitive in at least four states where Democrats are now in charge, the nation could see nearly two-thirds of all the governorships held by the GOP after this election. That would be the largest number of Republican governors in the country since 1921.

The Republican Governors Association raised a record $14.8 million in the third quarter of this year, giving it a total of $88 million for this election, double its 2008 fundraising pace. The group has already invested $6 million in Washington where McKenna hopes to accomplish what hasn’t been done since the year the upstart U.S. Olympic hockey team upset the powerhouse Soviet Union.

Edward Lee Pitts
Edward Lee Pitts

Lee is WORLD's Washington Bureau chief. As a reporter for the Chattanooga Times Free Press, he was embedded with a National Guard unit in Iraq. He also once worked in the press office of Sen. Lamar Alexander.

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