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President May Be Betting on Voters Having a Short Memory : Several governors have employed a policy known as ‘tax and mend,’ in which they raised taxes early on, giving them time to weather electorate’s wrath.

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TIMES POLITICAL WRITER

Critics dismiss President Clinton’s economic plan with a three-word epithet: “tax and spend.”

But the White House may be betting that a different dynamic governs the next four years: “tax and mend.”

As he struggles to get his economic plan through Congress and into law, Clinton is hoping to follow what has become the dominant strategy of governors who raised taxes over the last decade: get the bad news out of the way early.

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Governors from Democrat James J. Florio in New Jersey to independent Lowell P. Weicker Jr. in Connecticut have increasingly chosen to press major tax increases at the very outset of their term--even at the risk of appearing to violate campaign pledges--to leave time to mend relations with voters later, before facing reelection.

“There is no question in my mind that Bill Clinton is using the Jim Florio model of governing,” says Stephen Moore, who analyzes state fiscal policy at the libertarian Cato Institute. “That if you do something distasteful, do it in year one, and hope that people will forget by year four.”

None of the governors who followed this strategy over the last decade escaped without scars. From Florio to Weicker to former Michigan Gov. James J. Blanchard and former Ohio Gov. Richard F. Celeste, all saw their job approval ratings tumble after proposing new taxes--as has Clinton.

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Blanchard and Celeste watched anger over their tax hikes cost their party control of their state Senates in 1984; the anti-Florio backlash gave the GOP both chambers in New Jersey in 1990--ominous precedents for Senate Democrats contemplating next fall’s mid-term elections.

But several of the governors who followed the tax and mend route recovered enough to win reelection, despite predictions of certain doom when their tax increases initially bit.

“I had people betting $100 and $500 and taking odds against me when I started to run in 1986,” says Celeste, who won a landslide reelection that year despite substantially increasing the state income tax in 1983. “Ultimately, people respect people who act.”

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That proposition will receive some of its sternest tests over the next year. In November, New Jersey voters will render a verdict on Florio--who rammed through a $2.8-billion tax increase in 1990 after a campaign in which he said he did not see a need for new taxes. In 1994, California Gov. Pete Wilson--who accepted a $7-billion tax increase during his first year after strongly suggesting during his campaign he would reject any new taxes--is likely to seek reelection. Weicker--who imposed an income tax on Connecticut during his first year after criticizing the idea during his 1990 campaign--will also be on the ballot next fall, if he decides to run again.

In many respects, the experiences of these governors parallel Clinton’s as President. Like Clinton, all declared themselves surprised by the extent of their fiscal problems when they took office. And like Clinton, all were accused of violating campaign promises when they offered new taxes in response. If anything, Clinton was more candid than most: During his presidential campaign he openly proposed $150 billion in new taxes--though he also promised a middle-class tax cut.

Some Democrats who have worked with these governors see the examples of recovery as an encouraging precedent for the President. Like Celeste, Blanchard appeared doomed early in his first term, but won a resounding victory in 1986 against a weak GOP opponent. In Rhode Island, Democrat Bruce G. Sundlun won reelection in 1992 despite substantially raising taxes immediately upon taking office in 1991. Likewise, West Virginia Democrat Gaston Caperton broke a no-new-taxes pledge in the first months of his first term--and then won reelection in 1992 against an opponent who centered his campaign on repealing Caperton’s sales tax increase.

“Clinton ought to take comfort from the fact . . . that under the right circumstances leaders recover from this,” says Democratic pollster Geoff Garin, who advises Caperton.

But, generally, the right circumstances for the governors following the tax and mend route have included avoiding additional tax increases after their first year. Neither Florio nor Weicker have returned for significant sums. Blanchard and Celeste, boosted by the rising economy of the mid-1980s, actually rolled back their tax increases by the time they faced reelection.

In all cases, observers say, that period of calm was essential for dampening the tax issue. Even in New Jersey--where the backlash against Florio’s taxes drove down his approval rating to 18% at one point in 1990--taxes have faded well behind jobs as the voters’ top concern, according to a recent Newark Star-Ledger/Eagleton Institute survey. Florio’s approval rating has inched back up to 36%. Polls show him running even with Republican nominee Christine Todd Whitman in November’s election.

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“The tax issue in the state is not as volatile as it was a couple of years ago,” says Janice Ballou, director of the Eagleton Poll. “It happened, people are paying the taxes, and it didn’t kill them. That issue is smoldering, but it is the job issue people are focusing on.”

Something of the same sentiment appears to be salving Connecticut, where Weicker’s approval rating has reached 39% after bottoming out at 19% in October, 1991.

“If there is another year of stability (without a tax increase), he might be in pretty good shape to make the argument that we took the hard medicine but at least we solved the problem,” says G. Donald Ferree Jr., associate director of the Roper Center for Public Opinion Research at the University of Connecticut.

Reaching that equilibrium may be more difficult for Clinton. One senior economic official said the Administration does not anticipate asking for additional taxes to reduce the deficit if it is able to pass its economic plan this year. Clinton has even hinted he might offer a middle-class tax cut before his first term ends. But Clinton also will have to raise a potentially large sum to fund the health care reform plan expected later this year.

Clinton’s rapid decline in the polls, and the sharp expressions of public discontent over his economic plan, have convinced some Democratic strategists that he should have focused on government reform and spending reductions for a year before requesting large tax increases. But the recent evidence from the states on that alternative to the tax and mend strategy isn’t particularly encouraging.

The test case is Florida. In 1990, Democrat Lawton Chiles won the governorship from Republican Bob Martinez--the most prominent governor who failed to win reelection with the tax and mend approach during the 1980s. Martinez had alienated his Republican base by extending the state sales tax to services in 1987 after focusing on spending cuts during his 1986 campaign; later he appeared indecisive by turning against his own plan, which the state Legislature subsequently repealed.

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Though the state faced a severe financial squeeze, Chiles didn’t ask for tax increases in 1991. Instead, he tried to rebuild public confidence in government by first cutting spending and “right-sizing” state operations--complete with advice from some of the experts now guiding the Clinton Administration task force seeking to “reinvent government.”

But when Chiles came back with his own proposal to extend the state sales tax to services in 1992, the opposition was just as intense--and most of his request was rejected. This year the Legislature entirely rebuffed his request for new taxes. And to compound the insult, the governor’s approval rating has sunk to equal Martinez’ lowest.

That’s a cautionary tale for those Democratic strategists who argue that Clinton should have cut first and raised taxes later. Another entry in that ledger is the fact that former President George Bush wasn’t helped much by waiting until his second year in office before breaking his no-new-taxes pledge.

All of this evidence buttresses the view of those political analysts who say that if taxes must be raised, the best course is to follow Shakespeare’s advice for killing kings: “If it were done . . . then ‘twere well, It were done quickly.”

Five Governors Whose States Raised Taxes

Former Michigan Gov. James J. Blanchard appeared doomed after proposing new taxes early in his first term. The Democrat won a resounding victory in 1986 against a weak GOP opponent.

Former Ohio Gov. Richard F. Celeste, a Democrat, won a landslide reelection in 1986 despite substantially increasing the state income tax in 1983.

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New Jersey Gov. James J. Florio will go before voters in November. The Democrat rammed through a $2.8-billion tax increase in 1990.

California Gov. Pete Wilson accepted a $7-billion tax increase during his first year. The Republican is likely to seek reelection.

Connecticut Gov. Lowell P. Weicker Jr.’s approval rating has reached 39% after bottoming out at 19% in October, 1991. The independent imposed an income tax during his first year.

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