Today's New York Times features a story entitled, "Storming Statehouses With Plans for Growth," which details some of the plans that many of the Democrat and Republican candidates for governor have to spur job creation and economic growth.
As Damien Cave writes, "Democrats and Republicans in the 37 races for governor this year have published economic plans that for all their differences share what experts describe as a significant shift: public investment, government support and education are all likely to become less one-size-fits-all, and more focused on the dorm-room dreams of budding entrepreneurs." He goes on to write, "And government, many future governors now say, must become more agile and responsive to business. Corporate regulations would be eased or eliminated by candidates from both parties in California, Pennsylvania and several other states, while plans to simply create connections among employers, state government, other nations, venture capitalists and universities are being promoted by candidates across the country."
Among the proposals are tax breaks for startups and job creation, replacing economic development corporations with non-profit groups run by business executives, locating enterprise zones near universities to link entrepreneurs with research talent pools, and applying business concepts to education. There are also proposals to streamline government to make it more nimble. On balance, many of these proposals look to make government more equipped to work with businesses in a 21st-century economy.
Overall, I think these plans are welcome news. Governors look as though they realize that the old way of doing business and creating jobs, namely more government spending, has not worked. It also appears as if the governors are seriously looking at tax reforms to reduce the crippling tax burden. However, many of these proposals are targeted tax credits and incentives for certain industries to site businesses in the states. These narrowly-targeted policies have had mixed results. Given the state of the states, what is needed most is broad-based, bold reforms to taxes and spending. What would work best is what governors like Rick Perry of Texas and Chris Christie of New Jersey have proposed, including reductions in state spending, caps on taxes, and more manageable and accountable government.
While these proposals are good start, they are only a start. A lot more will be needed to turn the states around in the worst economic downturn in generations.