Partisan Polarization in the States and Localities: Consequences in the Next Downturn

Nov 25, 2019

By Scott Pattison, Senior Fellow with the Institute for Fiscal Studies, University of Ottawa, founder of Pattison Strategies LLC, and former executive director of the National Governors Association.

Partisan polarization in the U.S. has festered in the last decade, but the harsh rhetoric and inability to get things done has been much more pronounced at the federal level than at the state and local levels.  Sadly, I predict that the polarization by party will increasingly become consequential at the sub-federal levels and will become particularly apparent during the next downturn.

During a visit to Phoenix many years ago, a finance cabinet secretary said, “I fear the Washingtonization of state politics all over the country.”  This was when federal budgets were becoming increasingly difficult to pass, but even before the polarization at the national level grew and became particularly contentious during the end of the Iraq war and the fight over “Obamacare”.

Still, even as a witness to the daily negative D.C. rhetoric and gridlock, I remained optimistic that state and local government would still be a place where compromise and the quest for solutions would prevail.

However, division and political polarization has the real potential to plant the seeds for fiscal and policy poison ivy that invades the gardens of state and local government.  I’ve seen this phenomenon first hand, as through my career there’s been a change in attitudes in politics to one that seeks division rather than consensus.

As campaign strategists moved from attempts to enhance their candidates’ appeal to a broad audience to one that plays  to their political base, this phenomenon has accelerated exponentially.

Compromise has become a dirty word. Part of the problem is the strong incentive of politicians to avoid being seen by their base as “giving in”. I’ve watched the importance of sticking to an absolute position become  more important than giving some concessions that lead to a consensus-created win-win result for everyone.

At the state level, I fear this will soon cause increasing difficulty in coming to agreement on the most important action that elected officials must do: pass a budget. While healthy economies can paper over and mask divisions, scarce resources create tense fights over the budget.

I predict that as soon as there’s a downturn, state legislators and governors will have difficulty coming to agreement on budgets, especially those with government split between parties.

During the last downturn, a handful of states id have difficulty passing budgets. The National League of Cities released a report just the other day that stated 2/3rds of city finance officials expect revenue growth to decline next year. As a result, I’m concerned that disabling dissonance in highly partisan city councils and legislatures may be imminent.

For the thirteen states with divided power between parties, the attempts to achieve compromise will be more difficult and budgets and other important legislation will be in peril. . For the rest of the states where one party controls the Governorship and the Legislature, views and concerns of many residents will not necessarily be addressed. This will only lead to further resentment and polarization if residents do not feel they are being heard. The polarization will lead to even more of a partisan divide.

The other troubling impact of political polarization is the lack of substantive policy discussion about the budget. Discussion over whether to expand Medicaid, for example, took place with legislators showing fealty to their pre-ordained party position. These conversations often lacked substantive discussion and became confusing.

Slogans and rhetoric to appeal to the party base overtook a healthy discussion about a number of other health care issues as well.  The same is true for higher education. For decades, there was a rough consensus on its overall value. For years following World War Two, it was almost part of the definition of the American dream to send young people to college.

Now there’s a partisan divide on that issue. The Pew Research Center found that Republicans have a negative view of higher education (59% negative versus 33%) while Democrats have a positive view (67% to 18%). This divide can’t help but have an impact on decisions about funding of state universities and colleges.

Pundits bemoan the current state of partisan polarization, gridlock and harsh rhetoric at a national level, where it simply seems to grow. There hasn’t been as much attention to state and local governments which have – on a relative scale – avoided some of the worst consequences during this divisive political period.

I predict that this will change. The next downturn will expose the sad underbelly of partisanship in states and localities. When resources are tight and there’s a smaller and smaller fiscal pie to divide, partisan tension and increasingly dysfunctional fiscal debates will spread.