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

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

As governors deliver their annual State of the State addresses, many tailor their messages to address voters’ concerns about affordability.

Because the problem is so large, there are many things that governors can try. But for the same reason, there is no single policy that can bridge the gap between stagnant wages and rising expenses for many people.

Maine Democratic Gov. Janet Mills, for example, wants to send $300 relief checks to 725,000 residents. Others impose caps on utility increases or call for simpler ways to build more housing.

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 October AP-NORC poll. At least 4 in 10 people said the cost of housing, their savings, their salary and the cost of health care were “major” sources of stress in this survey.

A December AP-NORC poll found that about 9 in 10 U.S. adults said they had experienced higher than usual grocery prices in recent months, and about 7 in 10 said the same about electricity.

The government’s main inflation measure shows average annual prices rose less than 3% between 2012 and 2021, when prices rose sharply. Since mid-2023, annual increases have hovered around 3% – but prices are higher than they were before the surge. And some costs, including electricity and housing, have increased faster than average.

Republicans have long prioritized tax cuts as a way to provide relief to some people. Officials in states like Florida, Georgia and North Dakota aim to eliminate property taxes for homeowners over time. Kentucky and Mississippi are on a long-term path to getting rid of the income tax. Critics of these approaches warn that such measures could increase states’ reliance on sales taxes, which disproportionately affect low-income people.

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

But he has criticized the way his political opponents talk about affordability, repeatedly calling it a hoax or scam by Democrats, whom he blames for rising prices.

This allowed Democratic governors to criticize the president as out of touch with ordinary Americans, without saying his name.

“Some have even called affordability a hoax or a scam,” Virginia’s new governor, Abigail Spanberger, said in her speech. “And I would invite them to come to Virginia and engage with the families and business leaders that I met…because the facts tell a different story.”

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

In his State of the Commonwealth address last month, Healey called for converting empty offices into apartments and using government-owned properties to build housing. Hobbs proposed charging a daily fee on vacation rentals and using the money generated to help families cover housing and utility costs. Newsom told lawmakers they should pass legislation to prevent institutional investors from buying homes in bulk.

Francis Torres, director of housing and infrastructure projects at the Bipartisan Policy Center, said some of the most radical actions don’t immediately lead to new housing. “There is a difference between legalizing housing on paper and housing actually being built,” he said. And this is why the authorities are also trying to offer support in the form of installments and other methods intended to help in the meantime.

Trump has advocated for policies to keep housing values ​​high — which protects current homeowners but hurts many renters and people looking to buy their first home.

In New Jersey, utility rates figured prominently in discussions during last year’s gubernatorial race. When Democrat Mikie Sherrill was sworn in in January, she immediately signed two executive orders: one to freeze utility rates and another to increase electricity generation, including solar and nuclear power.

Indiana Republican Gov. Mike Braun supports a measure that would not allow investor-owned utilities to increase their profit margins unless they provide their customers with affordable energy.

Healey, who is running for reelection this year, announced in his January State of the State address that all customers’ electric bills would be reduced by 25 percent and gas bills by 10 percent in February and March. Part of the electricity reduction must come from a fund that would otherwise finance clean energy and energy efficiency projects. Utilities accepted the rest of the cuts.

In Washington state, Democratic Gov. Bob Ferguson is calling for an income tax on those earning more than $1 million a year — in a state that now has no income tax at all.

He pitches it as a way to help other Washington residents meet their expenses — using a portion of the revenue to fund an expanded tax credit for working families and to provide tax relief to small business owners.

Indiana’s Braun said the key to affordability is attracting more higher-paying jobs to the state, which he said has already happened, noting that hourly wages grew faster than the national average last year.

In Rhode Island, Democratic Gov. Daniel McKee this month unveiled what he calls an “affordable for all” package that leans heavily on tax policy and includes creating a refundable child tax credit, cutting gas taxes and removing them from Social Security, as most states have already done.

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