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

State officials are attempting to address voters’ worries about the rising cost of living, including housing and everyday items such as groceries, utilities and child care.

As governors give their annual state of the state speeches, many of them are designing their messages to speak to constituents’ concerns about affordability.

Because the issue is so broad, there are a lot of things governors can try. But for the same reason, there’s no one policy that’s likely to bridge the gap between stagnated wages and expenses that are growing for many people.

Maine’s Democratic Gov. Janet Mills for example, wants to send $300 relief checks to 725,000 residents. Others are imposing caps on utility hikes or calling for easier ways to build more housing.

Affordability is a major concern across US

The idea of improving affordability was at the heart of New York City Mayor Zohran Mamdani’s campaign last year, and it’s resonating nationally.

About half of U.S. adults – 54% – said the cost of groceries was a “major source” of stress in their lives, according to an AP-NORC poll from October. At least 4 in 10 said the cost of housing, their savings, their pay, and the cost of health care were “major” sources of stress in that poll.

AP-NORC polling from December found about 9 in 10 U.S. adults said they had experienced higher prices than usual for groceries in recent months, and about 7 in 10 said that about electricity.

The government’s main measure of inflation shows that average annual prices rose by less than 3% from 2012 until 2021, when prices rose sharply. Since the middle of 2023, annual increases have been hovering around 3% — but price tags are higher than they were before the surge. And some costs — including electricity and housing — have risen faster than the average.

Democrats and Republicans disagree over approach

Republicans have long prioritized tax cuts as a way to give some people relief. Officials in states including Florida, Georgia and North Dakota are aiming to eliminate property taxes for homeowners over time. Kentucky and Mississippi are on long-term paths to get rid of income taxes. Critics of those approaches warn that such moves could increase states’ reliance on sales taxes, which disproportionately affect low-income people.

When President Donald Trump was seeking a return to the White House in 2024, he promised to “make America affordable again” and has recently returned to the theme.

But he’s been critical of the way his political opponents talk about affordability, repeatedly calling it a hoax or scam by Democrats, whom he blames for higher prices.

That made an opening for Democratic governors to criticize the president as out of touch with everyday Americans without uttering his name.

“There are some who have even called affordability a hoax or a con job,” Virginia’s new governor, Abigail Spanberger, said in her address. “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 may be the biggest affordabili
ty factor

California Gov. Gavin Newsom, Massachusetts Gov. Maura Healey and Arizona Gov. Katie Hobbs, all Democrats, have called for multiprong approaches to affordability with a focus on housing.

In her state of the commonwealth speech last month, Healey called for converting empty offices into apartments and using government-owned property to build housing. Hobbs proposed charging a nightly fee on vacation rentals and using the money it generates to help families with housing and utility costs. Newsom told lawmakers they should pass a law to stop institutional investors from buying homes in bulk.

Francis Torres, director of housing and infrastructure projects at the Bipartisan Policy Center, said that some of the most sweeping actions don’t immediately lead to new housing. “There’s a difference between legalizing housing on paper and the housing actually being built,” he said. And that’s a reason that officials are also trying to offer support with down payments and other methods intended to help in the meantime.

Trump has argued for policies to keep the value of housing high — which protects current homeowners but hurts many renters and people looking to buy their first home.

Governors pay attention to rising utility costs

In New Jersey, utility rates were a big part of the conversation in last year’s governor race. When Democrat Mikie Sherrill was sworn in in January, she immediately signed two executive orders: One to freeze utility rates and another aimed at establishing more electricity production, including solar and nuclear power.

Indiana Republican Gov. Mike Braun is supporting a measure that wouldn’t allow investor-owned utilities to increase their profit margins unless they provide customers with affordable energy.

Healey, who is running for reelection this year, announced in her January state of the state speech that all customers’ electric bills would be reduced by 25% and gas bills by 10% in February and March. Part of the electric reduction is to come from a fund that would otherwise pay for clean energy and efficiency projects. Utilities agreed to the rest of the reductions.

Other approaches include income taxes and higher wages

In Washington state, Democratic Gov. Bob Ferguson, is calling for an income tax on those who make over $1 million a year — in a state that now has no income taxes.

He’s framing it as a way to help other Washington residents with their expenses — by using some of the revenue to pay for an expanded tax credit for working families and to give small business owners a tax break.

Indiana’s Braun said the key to affordability is attracting more and higher-wage jobs to the state, something he said has been happening already, pointing to hourly earnings that grew faster than the national average last year.

In Rhode Island, Democratic Gov. Daniel McKee this month unveiled what he calls an “Affordability for All” agenda that leans heavily on tax policy and includes creating a refundable child tax credit, lowering taxes on gasoline and eliminating them on Social Security, as most states already have.

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Associated Press journalists Michael Casey and Linley Sanders contributed to this article.