Five Southeast states are certain to get new governors in November's election, potentially affecting their bond policies and finances.
Georgia, Florida, Alabama, South Carolina and Tennessee have gubernatorial elections and their incumbent governors are legally barred from running for another term.
For about 50 to 60 years Republicans have dominated the Southeast. But the Democrats' role in some of the regions' state houses have strengthened in recent years. And this year they have reasonable chances of winning at least two more regional governor mansions – those in Georgia and Florida.
The switch from one governor to another, regardless of party, may not always lead to changes in fiscal, economic and debt policies. However, switches involving party changes are more likely to lead to changes.
Currently, there are Democratic governors in Kentucky (Andy Beshear since December 2019), North Carolina (Josh Stein since January 2025) and Virginia (Abigail Spanberger since January).
President Trump's declining popularity may spill over into voting for governors. As of Tuesday The New York Times average of recent national polls showed the president's popularity had reached its lowest point of his second term, with 58% saying they disapprove of his performance compared with 39% saying they approve it.
On Tuesday afternoon the
The primaries are May 19, with runoffs June 16 if the first round doesn't return a majority.
Of the seven Democratic candidates, former Atlanta Mayor Keisha Lance Bottoms has been polling about 20 percentage points ahead of her rival.
Muni Credit News Publisher Joseph Krist said Georgia's history, culture and voting rules support Republicans winning.
Democrats have won the most recent three U.S. Senate elections in Georgia. President Trump carried the state narrowly in 2024 after it went for Joe Biden in 2020.
Krist said the election has already affected the state's finances through the legislature's passage of a bill to regulate the increase of local property burdens and a cut to the state's income tax. The state is also foregoing $400 million in gas taxes through
"The recent trend [in Georgia politics] has been to insulate taxpayers from the unintended consequences of Georgia's growing economy by capping local property taxes, limiting/rebating state income taxes, offering up new local option sales taxes, etc.," said Justin Marlowe, research Professor in the University of Chicago Harris School of Public Policy, where he is director of the Center for Municipal Finance. "It seems like the gubernatorial candidates will have to decide whether they want to continue that trend or not. In that sense, the gubernatorial election could be consequential."
Krist and Marlowe both said the likely impending adoption of the
"Local government will be tested," Krist said. "The question is are the smaller localities in a position to move from property taxes to more regressive sales taxes? It is going to require a level of management skill not present in many local governments."
John Mousseau, executive vice president and chief investment officer at Cumberland Advisors, said, "If inflation becomes more embedded with the war in Iran, there will be debate on the increases coming under the [property tax increase] cap if that cap rises a lot because of higher fuel prices."
Most of Georgia's local governments and school districts are in good financial state, Marlowe said. "If there's a lurking credit risk, it's for those local governments that can't adapt their decision-making to those new [property tax] restraints."
In Florida, Republican Byron Donalds and Democrat David Jolly lead the gubernatorial field in their respective parties. However, the gubernatorial races are way too early to predict, said Susan MacManus, retired University of South Florida professor and political commentator.
The primary is comparatively late on Aug. 18.
Jolly was a Republican in the U.S. House from 2014 to 2017, became an independent in 2018, registered with a third party in 2022, and registered as a Democrat last year. Orange County Mayor Jerry Demings has a real shot of beating him, MacManus said, because polls show just 3 or 4 percentage points separating them.
Donalds benefits from Trump's endorsement. While he is in a stronger position than Democratic frontrunner Jolly has in the Democratic race, other Republican candidates could beat him — "stranger things have happened," MacManus said.
The race is too far out to assess now and people aren't paying attention, MacManus said.
Statewide party registration is about 41% Republican, 30% Democrat, she said. The Democrats are counting on an anti-Trump vote in the general election.
On Tuesday Cook and 270 to Win rated the Florida's gubernatorial race as solid for the Republicans. Krist said Donalds would benefit by having a lot of money. However, recent polls showed Donalds was only 4 to 7 percentage points ahead of Jolly or Demings in hypothetical matchups.
Assuming the race turns out between Jolly and Donalds, if Donalds wins he would institute much more pro-business friendly policies, MacManus said.
Florida's Office of Economic and Demographic Research predicted several types of critical needs spending will increasingly pressure state finances in coming years and would
The office predicts the spending category with the second largest increase is Medicaid. Over the long-term Jolly would handle Medicaid differently than Donalds, MacManus said.
Among the key financial issues in the Florida governor's race are rising property insurance rates, MacManus said. Both candidates address the topic prominently on their campaign websites.
"A state catastrophic fund that removes natural disaster perils from the private market would dramatically reduce property and car insurance rates, restoring affordability and price stability for millions of Floridians," Jolly says on his web site.
On his site Donalds doesn't provide specifics for his plans.
Mousseau said the
MacManus said rising insurance costs is one way Floridians no longer see growth as always a good thing.
Citizens Property Insurance Corp. had to pare back on the number of people it insured because it was requiring too much state government money, MacManus said. Some of the insured were forced to find other insurers. Citizens Property was founded as a backup windstorm and property insurance firm for those who couldn't get insurance from private companies.
The
"Florida's next governor is going to face serious challenges like looming budget deficits, unaddressed affordability issues, and the country's most inequitable tax code," said Esteban Santis, research director at Florida Policy Institute. "They will have to decide whether to continue underfunding the vital public services that Floridians rely on, or follow a new path to raise revenue and create programs that improve the wellbeing of everyday working people. They will also have the unique opportunity to appoint members of Florida's Taxation and Budget Reform Commission, which meets once every 20 years to bring tax changes directly to voters."
However the governorship turns out, Republicans are likely to retain both houses of the Florida legislature, MacManus said.
Krist said he thought the governorships of Florida, Alabama, Tennessee and South Carolina would remain in Republican hands.
