Tight Indiana Governor's Race Tests the Appeal of Privatization

Shift in power to states raises stakes in governors' contests across the US

Chrysler autoworker Lisa Rink has knocked on hundreds of doors here to get out the vote for the Democratic candidate for governor of Indiana, Lt. Gov. Frank O'Bannon.

"O'Bannon is definitely a friend of labor," says Mrs. Rink, a union organizer in this predominantly Democratic town north of Indianapolis. Forty percent of Kokomo residents work in the auto industry, but it is also ringed by Republican farming communities.

Reflecting that conservative element, the Mayor of Kokomo is backing Republican candidate Steven Goldsmith, the Indianapolis mayor who has earned a national reputation for out-sourcing government jobs.

"I think [Goldsmith] can run the state much more efficiently and save a lot of money," says Kokomo Mayor Jim Trobaugh.

Mrs. Rink and Mayor Trobaugh neatly frame the two sides of this tight race, one of 11 gubernatorial contests nationwide.

While this is an off year for governor races (in 1998 there will be 36 states in play) and the Democrats have little chance of regaining the majority they lost two years ago, the federal devolution of power to the states has raised the stakes in every race.

Washington and New Hampshire are leaning toward Democratic candidates. The Republicans are likely to take Montana, Utah, and North Dakota. But West Virginia, like Indiana, is too close to call.

The stakes

What gives the Indiana race particular urgency for both parties is that a Republican victory would give the GOP hegemony in the Midwest. Republican governors sit in the statehouses of Ohio, Michigan, Illinois, and Wisconsin.

The contest in Indiana is also seen as one of the clearest confrontations between two of the nation's leading political creeds: the moderate conservatism of New Democrats such as Indiana's Gov. Evan Bayh, and the government-slimming via privatization stance of hard-line Republicans.

The Democrats are eager for a victory that would vindicate Governor Bayh's philosophy. For the Republicans, regaining control of this otherwise stalwart GOP state is virtually "a quest for the holy grail," says pollster Brian Vargus at Indiana University.

Both candidates are well-liked, but they stand on strikingly different platforms.

Mr. O'Bannon pledges to build on the record of the immensely popular Bayh, who is barred by state law from seeking reelection to a third term. Bayh's success has much to do with the strength of the Indiana economy.

Indiana's job growth has been steady and personal incomes have risen faster than the US average in recent years. The state is enjoying its largest budget surplus ever - $1 billion - and there have been no tax increases in the past eight years, O'Bannon notes.

"The Bayh-O'Bannon administration has Indiana on the right track, and I intend to keep it moving forward on that road," says O'Bannon. He warns against a "radical detour" by Mr. Goldsmith, whom he refers to as "Mr. Privatization."

Goldsmith counters that Indiana needs "a bold reform agenda for the 21st century." His plan is to expand statewide his award-winning mayoral policy of opening government services to competition. Since Goldsmith took office in 1992, Indianapolis has bid out dozens of city services for projected cost savings of $230 million.

"Welfare, road maintenance, computer systems - they all should be subjected to competitive bidding," says Goldsmith. "Government is the problem and the market is the solution," he says, dismissing O'Bannon as "a traditional, big-government Democrat."

The great divide

Indiana voters are apparently divided between Goldsmith's small-government blueprint and O'Bannon's steady-as-she-goes approach.

Current polls show the candidates running neck-and-neck. And as they set about wooing voters, their campaign spending is expected to set a state record, surpassing $15 million.

"This is the closest gubernatorial race in the country this year - they are throwing out money like crazy," says Mr. Vargus, director of the Indiana University Public Opinion Laboratory.

The high stakes and down-to-the-last-minute excitement of the Indiana race stand in sharp contrast to most US gubernatorial contests this year, in part because there's no chance Democrats can regain the gubernatorial majority they lost in 1994.

Currently the GOP holds governorships in 32 states, almost double the Democrats' 17 (Maine Gov. Angus S. King Jr. is an Independent). Seven of this year's governor contests involve defense of currently Democratic seats - meaning that even an 11 race sweep would provide Democrats only a net gain of four states.

Still, governorships remain an important partisan battleground. This year's welfare-reform legislation, which handed much of the power to shape US policy towards the poor back to the states, has only enhanced governors' stature.

The allure of gubernatorial politics has prompted several senators to leave Washington in recent years to run for their state's highest political office - Massachusetts Gov. William Weld (R) and his current Senate bid to the contrary.

"Some of these [senators] are getting tired of being in a chowder-and-marching society," says Thad Beyle, a University of North Carolina political scientist.

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