Shortly before leaving office in January, former Maryland governor Martin O'Malley was speaking to a utility-company employee about setting up an account for his family's new private residence.
Asked how he spelled his last name, O'Malley responded: "Like the outgoing governor." The woman on the other end of the line quipped, "Ah, yes. The tax man."
O'Malley himself tells this story, perhaps to burnish his left-of-Hillary credentials for a 2016 presidential run. But the tax-happy reputation he gained in Maryland probably cost his party the governorship last November.
Republican challenger Larry Hogan, founder of the anti-tax group Change Maryland, defeated the Democratic candidate, then-lieutenant governor Anthony Brown, in a state that Gallup recently declared America's second-most Democratic. Republicans also captured the governor's mansion in politically blue Massachusetts and Illinois, continuing a remarkable state winning streak.
Pundits initially described Barack Obama's 2008 election as a major leftward shift in American politics. As the Obama era opened, the GOP held just 22 governorships and 14 state legislatures. But voters almost immediately began electing Republican lawmakers who rejected Obama's call for bigger government.
Today, Republican governors rule in 31 states, and the party has gained some 900 state legislative seats, giving it control of 30 legislatures.
Republican candidates' recent success resulted partly from local voter backlash against state tax increases during the Great Recession. Confronting budget crises back in 2009, with tax collections plunging 8% as the economy reeled, many governors assumed voters would accept a bigger government pinch on their income.
States proceeded to pile on $29 billion in new taxes in 2009, according to the National Conference of State Legislators. Republican gubernatorial hopefuls ran successfully against the rising taxes and in favor of restraining spending in 2009 and 2010.
The anti-tax fervor continued in 2014, spreading to solidly Democratic states. A Change Maryland study estimated that O'Malley's tax and fee increases cost residents and businesses $9.5 billion in extra money sent to Annapolis over his two terms.
Hogan rode to victory promising to eliminate some of the new levies and shrink taxes on retirees and small businesses. So far, the new governor has won a rollback of the storm-water fees and an income-tax reduction for some seniors.
Massachusetts Democrat Deval Patrick used the waning years of his governorship to propose an eye-popping $2 billion in higher taxes and fees. In 2013, the Democrat-dominated state legislature instead passed a smaller $500 million package of new taxes.
After Patrick declined to seek a third term, Republican Charlie Baker won the governorship by pledging to close Massachusetts's $1 billion budget gap without raising taxes. A former health-insurance executive, Baker also campaigned on the theme of competently managing the state's finances after widespread public criticism of Patrick's slapdash governing style.
In Illinois, Democratic Gov. Pat Quinn, mismanaging a budget that had accumulated more than $5 billion in unpaid bills, jacked up taxes by a staggering $7 billion in 2011. His Republican opponent in 2014, Bruce Rauner, campaigned victoriously on refusing to renew the new levies.
Rauner said that he would balance his first budget entirely with spending reductions. But after the Illinois Supreme Court shot down the state legislature's 2013 pension reforms this May, his task will be daunting.
(This year, the Democrat-controlled Illinois legislature sent the governor a budget that spends $3 billion more than the state has; Rauner has refused to increase taxes to close the gap, leaving the state without a budget going into the summer.)
Even as Republican newcomers battle to cut taxes, a handful of incumbent GOP governors, now entering second terms, are forging the next stage in the tax revolt. They're seeking to reform the way their states raise revenue by moving away from income levies — both individual and corporate — and toward consumption taxes, which tax people based on the money they spend, not on the income they earn. Change won't come easily.
Earlier this year, Gov. John Kasich, who has announced that he's running for the GOP presidential nomination, proposed extending Ohio's sales tax to services like public relations, lobbying and management consulting, while eliminating income taxes on small firms and poorer households, and reducing them for others.
The reform would produce a $500 million net tax cut, Kasich claims, and would elevate savings and investment. Underscoring the revolutionary nature of the proposal, his own Republican-led legislature cut income-tax rates by less than Kasich wanted and has refused for the time being to shift toward more consumption-based levies.
Maine Gov. Paul LePage's ambitious tax-reform proposal would similarly extend the sales tax to products like personal services. But at the same time, it would cut personal income taxes by lowering rates for all filers and, for poorer residents, expanding the amount of tax-exempt income, helping counter the charge that raising the sales tax hurts the poor.
The governor projects savings of nearly $300 million for state residents. His ultimate goal: end the state's income taxes. "But I'm no magician," he says. "It takes time." LePage has threatened to take his idea to voters in a ballot initiative if the Democrat-controlled state legislature doesn't pass it.
Tax reform has been part of a broader strategy of Republican governors to make their states more economically competitive and thus draw new businesses and investment, during a spluttering national recovery.
A key Republican competitive initiative has been right-to-work legislation, which empowers employees to opt out of joining a union if their workplace is unionized. Since 2012 three states, each with a GOP governor and legislature, have adopted the policy — Indiana, Michigan and Wisconsin.
Except for Ohio, every state with a Republican governor and legislature is now right-to-work — a likely game-changer in relocation wars, especially for blue-collar firms.
Right-to-work has doubtless contributed to the significant growth in industrial jobs in states with Republican governors. Since 2010, the U.S. has added 660,000 new manufacturing positions — and more than 500,000 were in states with GOP governors.
Among the biggest gainers: Michigan with 102,000 new manufacturing jobs, Texas with 72,000, Indiana with 63,000, Wisconsin with 34,000. The expansion contrasts with the struggles of Democratic strongholds, including former manufacturing powerhouses like California and New York.
Republican successes have encouraged at least some imitation in Democratic circles, primarily on taxes. New York governor Andrew Cuomo, most notably, waged a campaign to reduce taxes in 2014 by declaring, "New York has no future as the tax capital of the nation."
Eyeing these Republican gains, the Democratic Party's Victory Task Force earlier this year declared its intention to take back state capitals. But it remains to be seen whether the party is willing to face up to the reasons behind the GOP's winning streak.
The task force's initial document said nothing about economic or fiscal policies or about state competitive issues that Republican governors have used as a hammer.
Since Barack Obama's election in 2008, Republican candidates in the states have promised to show the country another way of governing. They've delivered. Judging by the evidence of 2014, the insurgency isn't over.
This piece originally appeared in Investor's Business Daily