Democratic Governors Weighed Down by Recession-Era Tax Hikes

In a midterm election season suddenly dominated by voter uncertainty over a disparate set of international events, one age-old issue has proved stubbornly consistent in at least a handful of the country's most competitive gubernatorial races: taxes.

Benjamin Franklin may have put it best when he wrote in 1789: "In this world nothing can be said to be certain, except death and taxes."

Though that was centuries ago, the ever-present tax struggle now lies before a handful of blue-state Democrats who are trying to convince voters that taxes raised under their watch were as necessary, or perhaps as unavoidable, as Franklin once indicated, and their political lives hang in the balance.

The issue is bedeviling Democratic Govs. Dan Malloy in Connecticut and Pat Quinn in Illinois as they seek reelection, as well as Democratic Lt. Gov. Anthony Brown of Maryland, who is running to replace the state's outgoing Gov. Martin O'Malley. All three incumbents raised taxes in 2011 to close recession-era budget shortfalls, and the issue has offered ample fodder for the Republicans now seeking to replace them who are hoping to capitalize off voter sentiment that they're being squeezed amid a still-sluggish economic recovery.

Each race carries its own specifics, but the general themes remain the same.

In Illinois, Quinn raised income taxes in 2011 to help fill a $15 billion budget deficit. At the time, he cast the hike as temporary, saying Illinois's "fiscal house was burning." But now Quinn is calling on state legislators to make the increase permanent after Election Day before a new set of lawmakers—and potentially a new governor—take office in January.

Coupled with the state's large unfunded pension liability, the issue has left Quinn vulnerable to attacks that he's incapable of managing the state's troubled finances. His Republican opponent, wealthy venture capitalist Bruce Rauner, opposes making the 2011 increase permanent and is pledging to freeze property taxes, and not raise them without first seeking voter approval.

Like Quinn, Malloy raised taxes in 2011 in Connecticut to help close a budget deficit, and is now getting hammered for it. Malloy's Republican challenger Tom Foley and his supporters have run a litany of television ads similar to one launched on Monday by the Republican Governors Association. The ad flashes a clip of Malloy during his 2010 campaign saying: "We're not raising taxes. That's the last thing we will do," followed by headlines labeling the 2011 increase the "Largest Tax Increase in State History."

In Maryland, Brown is now also looking unexpectedly vulnerable, and this too may come down to taxes. A recent Washington Post poll showed Maryland voters ranked taxes as the No. 1 issue driving their vote in the governor's race, and credited Brown's opponent, businessman Larry Hogan, as the candidate most capable of tackling the issue. It was the only issue on which voters preferred Hogan over Brown. The same poll showed Brown leading Hogan overall by a surprisingly slim 9 percentage points, while polls show Quinn and Malloy deadlocked in their respective races.

Republican strategist Dan Hazelwood thinks Maryland voters in particular are left with the impression that O'Malley went a step too far to raise additional money to enact a broad Democratic agenda in order to lay the groundwork for a potential presidential run, and now Brown is bearing the brunt of their frustration.

"O'Malley was getting ready to run for president so he wanted to pass every litmus-test liberal program, so that's where the money went, not to programs that a very broad, middle part of the electorate saw," Hazelwood said.

According to records from the National Taxpayers Union, O'Malley was also one of the few governors who acted on his party's frequent calls to raise taxes on the wealthy, along with Minnesota Gov. Mark Dayton and California Gov. Jerry Brown, though Brown did so through a voter-approved ballot measure in 2012. Colorado Gov. John Hickenlooper attempted to do as Brown did in 2013, but his initiative to raise taxes for education funding failed on the November ballot that year.

This year, Republicans' only hope for statewide victory in states such as Connecticut, Illinois, and Maryland lies in winning sizable margins among the older, mostly white, suburban voters who make up a bigger share of the electorate in midterm years, and are typically more sensitive to tax talk.

The Cook Political Report's David Wasserman detailed in April how, in 2013, Democrat Terry McAuliffe was aided in his off-year Virginia gubernatorial win by support from voters in so-called "Super ZIPs," or those areas dominated by wealthy, well-educated, and predominantly white voters who shied away from Ken Cuccinelli because of his conservative social views. But absent such ideologically polarizing figures, these areas are typically GOP strongholds, and according to census data analyzed by The Washington Post, regions within all three states in question here rank high among areas with big concentrations of such voters.

"Taxes is one of those issues where suburban Republicans—and softer Republican voters who may not agree with Republicans on social issues, but do agree with them on fiscal issues—still tend to trust the Republican Party more than the Democrats," said Republican pollster Rob Autry, who serves as a partner at Public Opinion Strategies.

The tax increases don't necessarily spell doom for Democrats, however. When it comes to tax fairness, Quinn and Malloy have kept themselves afloat by aggressively working to cast Foley and Rauner, both of whom are personally wealthy, as out-of-touch millionaires who can't claim the upper hand on the issue because they themselves pay low tax rates and favor additional tax cuts for the wealthy.

"Bruce Rauner and Tom Foley are trying to join the ranks of Republican governors who have cut taxes for the wealthiest, big corporations, and special interests and paid for it by raising taxes on middle-class families and gutting funding for education," said Democratic Governors Association spokeswoman Sabrina Singh. "Voters recognize these misguided priorities when they see them, which is why they're siding with Democrats who are working to build an economy that works for everyone."

Democrats are also working to demonstrate they care about voters' pocketbooks by lining their platforms with pitches to raise the minimum wage and close the gender pay gap.

Lee Schalk, the state government affairs manager at the National Taxpayers Union, believes taxes will inevitably be part of any electoral equation, no matter the degree to which Democrats focus on other issues.

"Voters are going to the polls because they're concerned about issues that affect their pocketbooks, whether it's in governors' races or on ballot measures," Schalk said. "It's playing a factor and it's a pretty significant factor."