Budget Shortages Disrupt Governor Races

PROVIDENCE, R.I.—Connecticut Gov. Dannel Malloy is preparing for the worst. The Democratic Governors Association chair told reporters at a press conference here Friday that it would be “impossible” for his state, currently contending with a $2 billion deficit, to also take on additional Medicaid-related costs should Congress pass Republicans’ plan for health care.

The situation in Connecticut is not unique. As over half of the nation’s governors gathered here for the biannual National Governors Association meeting last weekend, nearly three quarters of the 33 states facing budget shortfalls this fiscal year and next will elect governors by November 2018.

That adds additional turbulence to the gubernatorial contests, which are already unpredictable given the proliferation of open-seat races amid the national political environment.

“It’s a bipartisan issue,” Malloy said after the DGA-organized event.

The most high-profile standoff is in Illinois, where the Democratic-controlled legislature this month overrode Republican Bruce Rauner’s veto to give the state its first budget since the first-term governor took office. Rauner opposed the measure, lambasting “Speaker [Michael] Madigan’s 32 percent permanent income-tax increase.”

Democrats have pounced on Rauner’s opposition to the bipartisan law as another cudgel against Rauner, Republicans’ most vulnerable incumbent, who is up for reelection in a state that Hillary Clinton carried by 17 points in November.

“The damage that he’s inflicted is done,” one of Rauner’s potential opponents, Democratic megadonor J.B. Pritzker, said in a phone interview Saturday, citing the impasse’s effect in the closure of state agencies and the pending fight over school funding. “People just don’t ever want to go through that again,” Pritzker added.

The Republican Governors Association has similarly sought to pin blame for Connecticut’s economy on Malloy, who is not seeking reelection. But RGA Chair Scott Walker’s Wisconsin has joined Connecticut among the five states entering the fiscal year without a spending plan.

“I think the bigger issue than just where the budgets are at is which direction they’re going to take the state,” Walker said Friday. “Are they going to find more efficiencies or are they going to raise taxes, and where are they going to invest in priorities? It’ll play out state by state.”

Republicans are also blaming two Democratic governors on the ballot next year for their respective states’ delays. Pennsylvania Gov. Tom Wolf skipped the NGA summit to continue talks with the legislature and Republican Speaker Mike Turzai, a likely challenger.

Rhode Island state Rep. Joe Trillo, who is exploring a bid for the GOP nomination to challenge Democratic Gov. Gina Raimondo, said on Friday outside of an RGA event that a budget standoff blocks away at the state capitol “shows no leadership” from the governor. Raimondo countered Saturday that the onus was on Democratic legislators to “do their job, pass a budget, and put people first.”

Two state governments with open gubernatorial contests—New Jersey and Maine—shut down over the Fourth of July weekend. Democratic former Ambassador Phil Murphy and Republican Lt. Gov. Kim Guadagno, the nominees to replace New Jersey Gov. Chris Christie this year, both critiqued the budgetary process that led to that state’s shuttering, and Guadagno went the extra step of calling for the sale of the state-owned beach house from Christie’s now-infamous vacation.

Democratic candidates are also targeting a pair of red states, Kansas and Oklahoma, where term-limited GOP governors have grappled with structural deficits.

Oklahoma Gov. Mary Fallin faced opposition during negotiations from members of both parties who are eyeing her job. In an interview last week, Fallin called state House Democratic Leader Scott Inman, a 2018 candidate, an “obstructionist” because he “chose to lock up his caucus” against her proposals. And Republican Lt. Gov. Todd Lamb quit the Cabinet when Fallin proposed increasing fees to balance the budget.

“The lieutenant governor, he’s been running for governor for a long period of time, and it’s just a political decision he had to make,” Fallin said.

Massachusetts and New York also blew past their budget deadlines, forcing stopgap measures and late-night negotiations. New York Gov. Andrew Cuomo has no Republican opponent yet for his expected reelection bid next year, while Democrats vying for the nomination to challenge Massachusetts Gov. Charlie Baker accused the incumbent last week of mismanaging the state’s savings.

“Governor Baker’s entire case for being governor is that he’s a good manager,” former state budget chief Jay Gonzalez, one of Baker’s potential Democratic challengers, said in a phone interview. “And the most important thing he has to manage is the state budget. And he has failed miserably at that.”

Alaska Gov. Bill Walker has the toughest task of all. The first-term independent signed the budget last month shortly before a potential government shutdown during what he told Washington reporters was the “worst financial crisis in our state’s history.”

Walker said in an interview that while people are “disappointed” about cuts to the government’s annual disbursement of dividends to residents, he’s also facing voters who don’t want tax increases or cuts to state services.

“I ran for this job to do the job, not keep the job,” he told reporters. “When I start making decisions based upon reelection, shame on me.”