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Sat July 14, 2012
Two Governors, Two Approaches To Solvency
Originally published on Sat July 14, 2012 7:21 pm
GUY RAZ, HOST:
This weekend, governors from around the country are convening in Williamsburg, Virginia, for their annual meeting. The convention is happening at a time when most states are struggling to balance budgets and close deficits. In many cases, that's meant cutbacks.
We're going to hear from two governors now and two very different approaches in tackling slow growth and high unemployment. In a moment, Georgia's Republican governor, Nathan Deal, who has slashed spending, but first, to Massachusetts governor, Deval Patrick, where spending is up four percent from last year.
GOVERNOR DEVAL PATRICK: I could tell you from my own experience in business, nobody's going to get a recovery and job creation without growth, and we're not going to get growth without investment. And government has a role to play in that. Not the sole role, but it has a role to play in helping people help the fills. And that's the reason why we've been growing jobs faster than most other states. Our unemployment rate is now at six percent and falling well below the national average. We're making good progress.
RAZ: Where are the places that you believe people like you should prioritize? Where should the money be going?
PATRICK: Well, education, first and foremost. I think it's also important that we invest in rebuilding a deeply neglected infrastructure. And that's not just true of Massachusetts. It's true all over the country. So we've doubled our infrastructure investment on an annualized basis. And, in fact, because of that and the management of our budget during this fiscal crisis, we are one of the only couple of states whose bond rating has actually gotten stronger during the downturn.
RAZ: You - like many governors across the country, you have to balance your budget.
PATRICK: That's right.
RAZ: It's a requirement. You did that this time around, partially by using money from the state's rainy day fund, about $350 million. Why not increase taxes to meet that shortfall?
PATRICK: Well, because, you know, we're still trying to climb out of recession. And I'm not one who believes we should always turn to - or even often turn to tax increases.
RAZ: But with respect to that rainy day fund, I mean, presumably, your successors will have to dip into that fund to continue to balance the budget if the economy doesn't gain the kind of strength that we all hope it will.
PATRICK: I'm quite convinced that the growth trajectory we're on will continue. This idea of just trying to cut spending and cut programs and hunker down is a failed strategy, and it's been proven to be a failed strategy over history.
RAZ: That's Massachusetts governor Deval Patrick who joined us on the line from his office in Boston. Governor Patrick, thanks.
PATRICK: Thanks, Guy. Be well.
RAZ: Let's go now to Georgia and its governor, Republican Nathan Deal. The unemployment rate there is 8.9 percent. And so Governor Deal's approach to reviving his state's economy has been to cut both spending and taxes, $100 million in tax cuts this past year alone.
GOVERNOR: One of there areas where we cut taxes was in the area of removing sales tax from energy that is used for manufacturing. We felt this was necessary in order to keep our state competitive. And, certainly, from the business side of things, the elimination of sales tax will help us in increasing our manufacturing job base in Georgia.
RAZ: Do you believe that now the choice is essentially maintaining a year of fiscal responsibility versus economic growth, or do you think you can achieve both?
GOVERNOR: Well, I think you can achieve both. And I think Georgia is an example of that. Since I took office in January of 2011, we have had $7.39 billion dollars of Capital investment in our state. This resulted in over 42,201 jobs. We have also seen our revenues continue to grow, although not as rapidly as we would like. So we're being able to see new job opportunities, new growth and revenue. I think that is the way that conservatives should govern, and we believe that it's paying of for us.
RAZ: Give me a sense of how challenging it is for you to govern at a time of this economic downturn?
GOVERNOR: Well, it is a challenge, because what happens at the state level is in large part due to what is either happening or not happening at the federal level. A certain uncertainty prevails. Businesses are concerned about the continued talk about tax increases. I know that they are concerned about the continued use of regulatory authority, especially through the EPA. I think this whole sense of not knowing what the federal government is going to do has caused people to not be willing to make the capital investments that we would normally anticipate.
RAZ: Do you believe that at a certain point, some of the government jobs and services that have been cut as a result of the economic downturn in Georgia, do you think that those will return or that those are gone forever?
GOVERNOR: Well, I think some of them will return, perhaps. But I believe that in an economic downturn, it gives government the opportunity to do something that it could not do in the good times, and that is, determine whether or not certain things that the government is doing are essential. We have done a pretty good job of consolidating various state agencies in order to do with less money what we think should be done and do it more effectively.
RAZ: One final question for you, Governor Deal. As you know, with the Supreme Court's decision on the Affordable Care Act, states now have the option not to take part in the Medicaid expansion. Will Georgia take part or opt out?
GOVERNOR: We've not made a final determination on that yet. We do know that even though the promise by the federal government is that they will pay the overwhelming portion of the extended Medicaid population, we do know that there are costs to the state. Hopefully, the November elections will give us some certainty as to whether or not we think the law will remain in place or whether or not it will be substantially altered legislatively at the federal level.
RAZ: That's Governor Nathan Deal of Georgia. He's a republican. Governor Deal, thank you so much.
GOVERNOR: Thank you very much. Good to be with you. Transcript provided by NPR, Copyright National Public Radio.