Responsibility for economy key issue

ROBERT TANNER
THE ASSOCIATED PRESS
July 19, 2004

Many state economies are finally pulling out of the doldrums, with governors chipping in through tax relief and other measures. The question in this election year is whether the president also deserves credit for the recovery.

State executives gather in Seattle on Saturday for a meeting of the National Governors Association -- three days of politics, policy talk and lobbying.

Democrats, critical of what they claim was President Bush's lack of attention during three years of tough times, say the progress is due to governors' innovations. Republicans counter that Bush's policies are helping states.

"We have moved forward economically because of our own measures," said New Mexico Gov. Bill Richardson, a Democrat. "And most states that are doing well economically ... are because of steps they are taking at the state level."

In Seattle, governors hope to discuss one element of tax policy -- the effort to capture sales taxes on Internet commerce, an ongoing NGA project.

But Democrat Tom Vilsack of Iowa said partisan disagreements this year made for a "conscious decision" to leave many topics off the table. What's left includes elderly care, homeland security and economic development.

Most states have finished their budget work for fiscal years that began, in all but four states, this month. Stronger economies meant the chance for some to turn to other priorities.

California Republican Arnold Schwarzenegger, who is struggling with billion-dollar deficits and a stalemate on the budget, was still able to win changes to workers compensation that he says will significantly lower insurance rates.

Arkansas Republican Mike Huckabee said those who maintain their economy is still suffering are like someone "getting their weather reports from an underground bunker from news reports six months ago. They're just not looking out the window."

Economist Steve Cochrane, who tracks state finances for Economy.com, said the news is good on balance, with strong and weak elements. "Improving, yes. Middling, yes," he said.

While critics have enough ground to stand on, at least a half-dozen states that were lagging behind financially are now catching up, he noted. Said Cochrane: "There's a pretty synchronous economic recovery across the board."

Home Loans Articles, Mortgage Loans Articles, Financial News