NOT ALL the consequential elections are for seats in the Senate and House. Voters in 36 states will be electing governors this fall, and voters in all but four will elect state legislators. You can also make a case that state elections will be as important, in the long run, as congressional contests. Over the past 20 years, state and local government expenditures have tended to rise faster than federal spending. In 1980, 45 percent of nondefense government spending went through state and local governments.
State and local spending is also concentrated: just eight states spend half the total. Those in the Sun Belt -- California, Texas, Florida -- have relatively few fiscal problems; they have lower than average unemployment and higher than average economic growth, and they can afford to keep paying for the services they want. Maryland and Virginia are in that position. But New York, Pennsylvania, Ohio, Michigan and Illinois have seen the populations of their big metropolitan areas decline, and some of their basic industries (autos, steel, rubber) collapse. In some cases, revenues have actually declined.
Most of these states have a tradition of generous public services, but now they are asking whether they can afford it. Most states raised taxes in 1981-82, though some called their raises "temporary." Now Republican candidates, such Lewis Lehrman in New York, Clarence Brown in Ohio and Richard Headlee in Michigan, are calling for cuts in state taxes. Democrats and more moderate Republicans are admitting that some services will have to be cut, and that tax cuts would be desirable. All know that they have to balance their budgets; they can't fulfill their promises with big deficits as President Reagan did.
And all believe that they must do something to stimulate economic growth. For years, the big states took growth for granted. They no longer can, and Republicans as well as Democrats suspect that one reason is high taxes. They understand that some of the things those taxes have brought -- higher education, transportation facilities -- have helped spur economic growth.
In a makeshift welfare state like ours, the difficult question is how much we can afford to spend on programs that we'd like to have. Candidates for governor and legislature in these big states and others like them have to face these dilemmas squarely -- if not on the campaign trail, then after they are elected.
Some of the most important questions about American politics next year will be decided when governors and legislators in Albany, Harrisburg, Columbus, Lansing and Springfield sit down and try to figure out how to balance their budgets.