Governors tackle rising cost of living with relief checks, tax cuts and housing policy

Governors across the United States are prioritizing affordability concerns in their policy agendas as Americans struggle with persistent economic pressures, despite easing inflation rates. This shift reflects growing voter anxiety about the cost of living that continues to outpace wage growth in many regions.

Maine’s Democratic Governor Janet Mills exemplifies this trend with her proposal to distribute $300 relief checks to 725,000 residents. This direct approach to affordability is gaining traction among state executives seeking to address constituent concerns about rising costs for housing, groceries, utilities, and childcare.

Recent polling underscores the urgency of these economic pressures. An AP-NORC poll from October revealed that 54% of U.S. adults consider grocery costs a “major source” of stress in their lives. At least 40% reported similar anxiety about housing costs, savings, wages, and healthcare expenses. A December poll found approximately 90% of Americans had experienced higher-than-usual grocery prices in recent months, with 70% reporting increased electricity costs.

While government data shows inflation moderating to around 3% since mid-2023 – down from the sharp increases in 2021 – prices remain significantly higher than pre-surge levels. Critical expenses like electricity and housing continue to rise faster than average, squeezing household budgets nationwide.

The affordability crisis has created both political challenges and opportunities. New York City Mayor Zohran Mamdani centered his successful campaign on cost-of-living concerns, reflecting a national resonance with voters feeling financial strain.

Partisan approaches to affordability reveal fundamental philosophical differences. Republican officials in Florida, Georgia, and North Dakota are pursuing gradual elimination of property taxes for homeowners. Kentucky and Mississippi are working toward removing income taxes entirely. Critics warn these strategies could increase reliance on regressive sales taxes that disproportionately burden lower-income residents.

Former President Donald Trump has embraced the “make America affordable again” messaging while simultaneously dismissing Democratic affordability initiatives as “hoaxes” or “scams.” This rhetoric has created openings for Democratic governors to position themselves as more attuned to everyday economic realities.

Virginia’s Governor Abigail Spanberger directly challenged this characterization in her address, stating, “There are some who have even called affordability a hoax or a con job. And I would invite them to come to Virginia and engage with the families and the business leaders I have met… because the facts tell a different story.”

Housing affordability emerges as perhaps the most critical component of the cost-of-living crisis. Democratic governors in California, Massachusetts, and Arizona have proposed comprehensive approaches to address housing shortages. Massachusetts Governor Maura Healey advocates converting empty offices into apartments and utilizing government-owned property for housing development. Arizona Governor Katie Hobbs proposed funding housing assistance through fees on vacation rentals, while California’s Gavin Newsom supports legislation to prevent institutional investors from bulk-purchasing homes.

Francis Torres of the Bipartisan Policy Center notes that policy changes don’t immediately translate into housing availability: “There’s a difference between legalizing housing on paper and the housing actually being built.” This reality drives supplementary initiatives like down payment assistance programs to provide more immediate relief.

Utility costs represent another major affordability concern driving gubernatorial action. New Jersey Democratic Governor Mikie Sherrill immediately froze utility rates upon taking office while promoting expanded electricity production. Indiana’s Republican Governor Mike Braun supports measures linking utility profit margins to affordable energy provision. In Massachusetts, Governor Healey announced temporary reductions in electric and gas bills, partially funded by clean energy and efficiency project allocations.

Tax policy and wage growth round out the affordability toolkit. Washington’s Democratic Governor Bob Ferguson proposes introducing an income tax on millionaires to fund tax credits for working families and small business relief in a state with no current income tax. Indiana’s Braun emphasizes job attraction and wage growth as fundamental solutions, pointing to hourly earnings that exceeded the national average last year.

Rhode Island’s Democratic Governor Daniel McKee has unveiled an “Affordability for All” agenda focused on tax relief, including a refundable child tax credit, reduced gasoline taxes, and elimination of Social Security taxes.

As these varied approaches demonstrate, the affordability crisis presents no simple solutions but remains a dominant concern driving state policy across political divides.