Economy becomes No. 1 issue in govs' races

updated 2:50 p.m. ET Oct. 22, 2008

In his bid to become the next governor of Missouri, Rep. Kenny Hulshof survived a bitter primary that at one point saw the candidates bashing each other for supporting public funding for drugs such as Viagra.

Then came the catastrophe on Wall Street. Now the economy has become the overriding issue that's tightening governors races across the nation.

"It's going to be the No. 1 reason someone keeps their job or loses it," said Del Ali, who has conducted polls in several governors' races.

Eleven states elect governors this fall, offering Republicans a chance to reduce the Democrats' current 28-22 majority of governors' seats.

And this year is only a prelude to 2010, when three of every five states will elect a governor. The winners of those races will have a crucial edge when it comes time to redraw electoral maps based on the 2010 census.

Earlier in the year, gubernatorial candidates talked about education and health care, along with the economy.

Then came soaring gas prices, a drumbeat of negative news about state budgets and Wall Street's unprecedented meltdown. The faltering economy now trumps other topics in several closely watched governors' races, some of which have become unexpectedly close.

Economic turmoil
The financial meltdown "puts an exclamation point on the challenges we're facing and every state is facing now," said Vermont Gov. Jim Douglas, a Republican seeking his fourth two-year term in office.

Some states have already reported problems accessing credit markets for short-term borrowing. The number of states with deficits is increasing. Tax revenue is flat or falling, and many states' unemployment compensation funds are dangerously low.

In Missouri, the economy was the top issue in recent polls that showed slight gains for Hulshof's opponent, Democratic Attorney General Jay Nixon.

The race is important enough that President Bush held a fundraiser for Hulshof earlier this month. That led to a swift retort from Nixon linking his opponent to the "failed economic policies of President Bush."

At a Thursday debate, Hulshof tried to link Nixon to the state's past economic troubles: "There was no hand-wringing by the attorney general when the previous Democratic governor actually presided over the state's economy."

In Indiana, Republican Gov. Mitch Daniels leads Democrat Jill Long Thompson in fundraising and spending. But Long Thompson is running even or just slightly behind in recent polls while she hammers Daniels with the claim that the state's economy is in trouble.

She rushes to remind people that Daniels was Bush's budget director.

"In Indiana, people know he's responsible for the largest deficit in the history of the world," Long Thompson said.

Jobs were up in August in Indiana, but the state's unemployment rate also rose. The state lost 17,600 jobs in July.

"There's no way to deny some of the national problems are impacting Indiana, but the governor's leadership has certainly put Indiana in a much better position than our neighboring states," said Daniels' spokesman Cam Savage.

In North Carolina, a state with a history of electing Democratic governors, the Republican Governors Association is running ads bashing Democratic Lt. Gov. Beverly Perdue over the economy. She's responded with a spot promoting her work providing jobs.

Republican Pat McCrory, the mayor of Charlotte, says education was the top issue in the past. Now the economy and jobs, along with energy prices, are "definitely on the minds of almost every area I go," he said.

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