Cost of living has been a major focus in governors’ State of the State addresses this year, with chief executives of the nation’s 55 states and territories taking action on affordability solutions encompassing everything from food and housing to energy and targeted tax relief that puts more money back into household budgets.
At NGA’s Winter Meeting, four Governors from different parts of the country sat down with moderator Mike Allen, Axios co-founder, to share their proposals and progress. The conversation showcased a strong consensus on both the challenges and the solutions.
Kentucky Governor Andy Beshear on workforce training as the key to giving the next generation more money in their pockets and a head start on achieving the American Dream:
- “Our goal has been to empower that next generation, whether it’s through education or through training, to try to create pathways. Not all kids are going to go to college. So we’ve invested $300 million in our career and technical education centers so people can have the skills to come in, not at an entry level wage, but at a higher wage. We’ve invited all of our employers into our community colleges. They sponsor different rooms; they send some of their people over to teach the classes, and we create a pipeline where our businesses can see where their employees are coming [from] even two years out. My goal is that I’m not going to choose the path for any of these young people. But we ought to have a path for what they choose. Just that idea that if we could go a couple generations and not lose a single 18-year-old upon graduation from high school; either they’re going on to higher ed or they’re going into a stable job. There’s a lot of opportunity there coming out of high school, whether it’s in the trades or another [path] to earn a real wage that can really combat affordability right at the beginning.”
Indiana Governor Mike Braun on harnessing the economic benefits of AI technology while shielding households from electricity price increases:
- “If we don’t take what we created – AI – and move it into its application, I know who will: the Chinese will. In terms of the geopolitical consequences, we have got to get it right. How does that work when everybody’s worried about the cost of electricity? The hyperscalers are going to have to pay for the generation of it. When I started the conversation in Indiana, I said, ‘Well, how many gigawatts do we currently produce? [The answer is] 20 gigawatts for all businesses and families.’ And of course, one hyperscaler in a data center can use a gigawatt. That was astounding… [Energy costs are] going to need to be borne by the beneficiaries of it: the hyperscalers. Then through good public policy, we need to make sure it’s harnessed in a way that is going to help the average individual that’s suffering from the affordability crisis. That is a lot to get correct. If we don’t get it correct, we’ll all pay the consequences at any level of government.”
Massachusetts Governor Maura Healey on governors using their convening power to explore policy innovations to bring down health care costs:
- “When it comes to health care, one of the reasons I love being in this room is that governors are where it’s at. [When] I was a basketball player, I was a point guard. As a governor, you’re quarterback. You’ve got incredible opportunity to convene, to bring people together. If you want to talk health care, it’s broken in America, and Congress hasn’t done a damn thing to deal with it, right? I can’t wait for Washington [to act]. So in addition to some of what we’ve done around health care already in my state, I put together a working group. They just started meeting a few weeks ago. Using convening authority, I told employers, insurers, providers: I need you in the room now. I need you all to give. We need to figure out some innovations to find a way to lower health care costs. …We’re seeing double-digit premium increases [nationwide]. People can’t afford it. Employers can’t afford it. So, what can we do as a state to bring more health care online? I think a quick way to some of this, frankly, is getting more care out into the community, growing an army of primary care providers and mental health providers. If we could attack those two things, I think we would save a lot of money down the line in emergency rooms and all sorts of scenarios that lead to higher costs. But again, my point is: States and governors are where it’s at in terms of leadership on policy and substance moving forward.”
Montana Governor Greg Gianforte on his state’s multi-pronged approach to reducing housing costs:
- “Housing affordability is driven primarily by supply or, more importantly, lack of supply. So we went to work on that problem. We changed our rules in the state – quadrupling the number of apprenticeship slots in the building trades – because if you want more houses you need more carpenters, plumbers and electricians. That was No. 1. The second thing we learned in studying the problem was that 40% of the cost of a new home is government regulations. If you require minimum lot sizes and large setbacks, you have to put big houses on big lots; they cost more, and they’re more difficult to afford. So we went through our regulatory code top to bottom. We got rid of minimum lot sizes; we authorized ADUs [accessory dwelling units] anywhere; we allow duplexes anywhere you could put a single-family home. We required our largest communities to do master planning so that when somebody walks in for a subdivision permit, if it matches the master plan that’s been fully vetted with the public, there are no public hearings; you just get the permit. And here’s the result: We’ve seen rental prices in our largest communities come down double digits. Home prices have flattened, and the American dream is in closer reach for more Montanans. We have more to do, but, all in, I think we did about a couple of dozen reforms in this area of deregulation to make it easier to build affordable homes.”
Watch the full session below, or on YouTube.
