INDIANAPOLIS — When they were colleagues in the House of Representatives, it was hard to find two more conservative Republicans than Bob Riley of Alabama and Mark Sanford of South Carolina. Both of them decided to run for governor in their home states in 2002 and both defeated the Democrats who were seeking second terms.
And that meant that both of them inherited the same kind of budget woes that afflict almost all the states — the byproduct of a long economic slump that has sapped tax revenues at the same time that Medicaid costs have been running out of control.
Their response has not been what you would expect. Unlike President Bush, who has allowed budget deficits to spin out of sight and prescribed tax cuts as the chief remedy for what ails the economy, Sanford and Riley have chosen a different — and more difficult — course.
Sanford — a businessman and term-limits advocate who chose to leave the House in 2000 after serving six years — remarked in an interview during the summer meeting of the National Governors Association here that "no one was further out than I was in Congress when it came to (cutting) taxes. But I still proposed raising cigarette taxes" to bolster the state’s Medicaid funds.
He cushioned the blow by coupling the immediate 53-cents-a-pack increase with a provision that would eventually reduce state income tax rates to a level closer to the average for Southeastern states. But the immediate effect would have been felt in the wallets of South Carolinians.
What turned tax-cutter Sanford into a tax booster? The realities of budget-making, which is to say, a crash course in the role of government in people’s lives.
"What I learned in Congress about the budget was all abstract," Sanford said. "Just a bunch of zeros. There’s nothing abstract about a state budget. I’m a conservative’s conservative. I favor limited government. But once a month, I invite the public to come in and talk, and after six hours straight of listening to people in compelling fiscal circumstances describe what cutting certain programs would do to them, it makes it a lot tougher just to cut."
So he asked for higher cigarette taxes, arguing that South Carolina’s were among the lowest in the nation and that putting the extra dollars into Medicaid would trigger an additional $400 million of federal health care funds "we’re leaving on the table in Washington."
The Republican-controlled Legislature wouldn’t agree. Sanford’s plan was rejected, but he said he will try again next year, with hopes of more business support to offset the lobbying clout of the tobacco companies.
Riley faces even tougher odds in a Sept. 9 Alabama referendum on a much bolder plan this businessman-politician pushed through the first session of his Legislature. Facing a $675 million budget gap, he decided to increase the stakes by seeking to raise $1.2 billion and reform the whole state tax structure in the process.
His argument, Riley said in a telephone interview when campaigning on the referendum prevented him from attending the conference here, is that it made no sense to seek just enough new revenue to maintain the status quo — a status quo that means inadequate schools, overcrowded jails and lagging social services. His goal, he said, is to do for Alabama what "New South" governors such as North Carolina’s Terry Sanford began doing for their states half a century ago: prepare their people for a modern economy.
The barrier to such change in Alabama is embedded in the state Constitution, written in post-Reconstruction days when large timber companies and cotton farmers locked in such low property tax rates and other tax limits that Alabama has one of the most regressive tax structures in the nation.
Many Republicans who supported Riley for governor are stunned at his advocacy, but he has found allies in the business elites and the newspaper editorial pages, who agree with his contention that building a first-class education system is vital to the state’s economic future.
"We’re behind in the polls," Riley conceded in the interview, adding that he has not been able to persuade lower-income Alabamians — including many African- Americans — whose income taxes would be cut by his plan, to trust a Republican to look out for their interests. Some supporters of the tax-form referendum have even reached out to Oprah Winfrey for help in selling the proposal, but the odds are against it.
It is ironic to see the anti-tax sentiment emanating from Washington confronted by conscientious Republican governors. But you have to admire their courage — and their realism.
David Broder can be reached at The Washington Post Writers Group, 1150 15th St. NW, Washington, DC 20071-9200 or by e-mail at davidbroder@washpost.com.
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