Click to visit City Journal California

By Steven Malanga:

Shakedown: The Continuing Conspiracy Against the American Taxpayer

By Steven Malanga, Victor Davis Hanson and Heather Mac Donald

The Immigration Solution.

By Steven Malanga
The New New Left: How American Politics Works Today

Soundings

Steven Malanga
As Goes New Jersey . . .
New governor Chris Christie could have national influence.
Winter 2010

Pundits have debated the national significance of Republican Chris Christie’s gubernatorial victory in heavily Democratic New Jersey last November. If the past is any guide, though, the importance of the win will depend on how the new governor actually governs. Back in 1993, the last time that the Garden State kicked out a Democratic governor in an off-election year, what the Republican winner, Christine Todd Whitman, did early in her tenure helped drive a widespread Republican surge in national and state elections. Christie could have the same impact on elections far from New Jersey if he delivers on his campaign promises to reform government, wrestle spending under control, and reduce taxes.

Like Christie, Whitman ran against an unpopular Democratic governor (Jim Florio) who had raised taxes significantly. But Whitman, an inexperienced candidate, was running a mediocre campaign and languishing 20 points behind in polls. Then, prodded by advisors Steve Forbes and Larry Kudlow, she pledged to slash income taxes. Newspaper editorialists derided the move as cynical politics, and Florio’s political strategist, James Carville, promised that his candidate would crush Whitman—and bury supply-side economics in the process. Carville knew that the stakes were high: his most prominent client, President Bill Clinton, had increased taxes earlier that year, raising worries of a backlash against Democrats in the 1994 midterm congressional elections.

Jersey voters, in an ornery mood, embraced Whitman’s call for tax cuts and gave her an improbable victory. She followed through on her promise and cut taxes by $122 million in the spring of 1994, just as the year’s many campaigns for national and state offices were getting under way. The reform unleashed a wave of tax-cutting pledges from candidates across the country, sending some Democrats scrambling to defend themselves. Republican gubernatorial candidates like South Carolina’s David Beasley and Oklahoma’s Frank Keating rode tax-cutting promises to victory. Even in solidly Democratic Maryland, Republican Ellen Sauerbrey shot up in the polls after announcing a Whitman-like fiscal agenda. Though her opponent, heavily favored Democrat Parris Glendening, enjoyed a two-to-one edge in voters registered with his party, he managed a mere 6,187-vote victory out of 1.36 million ballots cast.

Perhaps more importantly, Whitman’s tax reductions persuaded a core of national Republicans hammering out an agenda for the 1994 congressional elections to make tax cuts part of their Contract with America, which became a central document in the successful GOP campaign to win control of the House of Representatives that year. Whitman’s early actions as governor even put pressure on moderate Republicans uncomfortable with her fiscal agenda, like New York gubernatorial candidate George Pataki. In 1994, the state’s Republican Party had nominated Pataki—a moderate state senator without a distinguished fiscal record—to challenge incumbent governor Mario Cuomo. Pataki was heavily criticized even within his own party for initially failing to articulate an economic plan. Six weeks before the election, encouraged by big GOP donors impressed by Whitman’s success, Pataki fashioned a tax-cutting agenda even bolder than Whitman’s. He easily defeated Cuomo.

Whitman’s star never shone so bright again. As Jersey’s economy recovered and tax revenues poured into the state’s coffers, she let state spending drift upward. She failed to stop both Republicans and Democrats as they showered state-employee unions with rich pension and benefits deals, and she agreed to use fiscal gimmicks to pay for them. Over time, she became more interested in social issues than in fiscal discipline.

Democrats recaptured the state’s governorship and legislature in 2001. In his scandal-shortened three-year tenure in the governor’s office, Democrat James McGreevey raised 33 different taxes. Then Jon Corzine, who became governor in 2006, instituted another $1.1 billion tax increase soon after taking office and followed it with a host of new levies last year. The state has endured an almost perpetual budget and economic crisis since 2002.

Christie has vowed to cut taxes and spending and especially to reform overly generous public-employee pensions. He is sure to face a challenge from the state’s muscular public unions, which fought fiercely against his candidacy. But Christie clearly has public sentiment on his side. Three weeks after the election, in a Quinnipiac poll asking how the state should balance its budget, 68 percent of New Jersey residents said that they’d rather cut services than raise taxes, 61 percent backed public-employee layoffs, and fully three-quarters supported a wage freeze for state workers.

Most significantly, Jersey’s problems—high taxes and budget woes enabled by rich public-sector pay and benefits—are also faced by states with wide-open gubernatorial elections in 2010, especially California and New York. If Christie proves a committed and capable reformer right out of the gate, he will almost certainly influence the gubernatorial debate in those blue states and, in the process, help Republicans reestablish the credibility on fiscal issues that they squandered over the last decade in Washington.

Steven Malanga is the senior editor of City Journal and a senior fellow at the Manhattan Institute. He is the author of The New New Left.

SHARE
respondrespondTEXT SIZE
If you enjoyed
this article,
why not subscribe
to City Journal? subscribe Get the Free App on iTunes Or sign up for free online updates: