Good Economic News for Governors

The rise in the national unemployment rate must be bad news for governors seeking reelection this year, right? Perhaps, but it's certainly not as bad ...
by | April 4, 2008

The rise in the national unemployment rate must be bad news for governors seeking reelection this year, right? Perhaps, but it's certainly not as bad news as it could be.

I've noted before that the eleven states with gubernatorial elections this year generally have avoided the state budget problems befalling other states. The same is true of unemployment.

In February, the national unemployment rate was 4.8% (the newly released national numbers have it rising to 5.1%). Nine of the eleven states with gubernatorial elections this year fall below the national average.

Some are way lower, including Utah (3.0%), North Dakota (3.0%), Montana (3.3%), Delaware (3.7%) and New Hampshire (3.7%). The two that are slightly higher than the national average happen to be two open seats and among the most competitive races in the country -- North Carolina (5.0%) and Missouri (5.3%).

In other words, the eight governors running for reelection this year (and the Democratic nominee for the Delaware open seat) will be able to argue that they are weathering the economic storm better than the nation as a whole.

But this is a disaster waiting to happen for the much larger group of governors up for reelection in 2010, right?

Probably not. Ray Scheppach, the executive director of the National Governors Association, argues that the economic downturn offers governors opportunities for managerial innovation. I'd add that it also offers them opportunities for political survival.

The governors who ran for reelection in 2006 benefited tremendously from the economic and budgetary problems of 2003. In their campaigns, they argued over and over that they had turned massive budget shortfalls into balanced budgets or surpluses (forgetting, it seemed, that state constitutions require balanced budgets). Only one governor, Maryland's Bob Ehrlich, lost his reelection bid in 2006.

The same dynamic could play out in 2010, with governors claiming credit for fixing budgets messes and repairing the economy -- assuming, that is, the economy has actually recovered by November 2010.

Josh Goodman
Josh Goodman  |  Former Staff Writer
mailbox@governing.com

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