Over the next few weeks, TV and radio talk shows, along with op-ed pages and the blogosphere, will be bombarded with opinion and advice about what Congressional Republicans need to do in order to ingratiate themselves with the American electorate in the wake of their overwhelming victory on Tuesday.  It is likely even more words of wisdom will flow forth about how the administration and the Democrat leadership should react to Tuesday’s election results in order to salvage portions of their current agenda and endear themselves to voters prior to the 2012 election cycle.  Lost in much of this nationalized election landscape debate is the vast transformation that has taken place at the state level.

Nationwide, the election results tell of a striking shift in state legislative power.  Though a small number of races are still too close to call, it appears Republicans will emerge from this election with an additional six hundred and fifty or more state house and state senate seats, at least nine additional governorships, and control of at least seventeen additional state legislative bodies.  At a time when states are struggling to balance budgets in the face of declining revenues, meet education funding obligations, maintain infrastructure, deal with the massive unfunded liabilities associated with both healthcare and retirement funds, and most importantly, help get their citizens back to work, the overwhelming shift in state legislative power tells the story of an unhappy electorate that is unwilling to watch the same failed state and local policies continue on as the status quo.

The drastic shift in elected power speaks to an expectation by voters of a far-reaching shift in policy.  For many businesses and industries, both the pitfalls and opportunities of such an environment are endless.  There will undoubtedly be the usual lure of easy money through “sin” taxes, and though many states have been down this road before, there are likely circumstances under which some may be willing to revisit such proposals or adjust current policies in an attempt to capture even more “easy” revenue.  It is also likely that there are going to be instances of budget cuts and the defunding of government initiatives as immediate measures are taken to get states’ financial houses in order.  And in those cases, entities with state and local contracts will need to be both ready and willing to defend their piece of the pie.

But with economic recovery on everyone’s agenda and cries by voters for fiscal responsibility driving much of the Election Day wave, the potential for newly shifted balances of power to improve economic conditions at the state and local level is an exciting proposition.  After all, the goal of government is not to create jobs or build businesses, it is to create a favorable environment for job creation.  An environment in which businesses can incubate, grow, and eventually thrive, allowing local economies to thrive along with them. What will be interesting to see is the impact that these shifts have on local economic conditions, and if these newly elected legislatures are able to create the sorts of environments that eventually lead to greater economic prosperity.

Of particular interest are Alabama, Maine, and Wisconsin, all of which saw the election of both a Republican governor and a total shift of the state legislature to Republican control.  Two more states, Texas and Tennessee, elected or re-elected Republican governors and went from near even splits in the state legislature to overwhelming Republican control.  And still four more states, Pennsylvania, Michigan, Ohio, and Iowa, saw Republicans take control of the state house in addition to the election of a Republican governor; all but Iowa now have Republicans in control of the state legislature.  For those looking to gauge the responsiveness of elected officials, no measure will be more telling than the steps taken by these state legislatures in the coming year.

While the national media focuses on the new Congress and the administration’s willingness to work with new leadership and reach across the aisle, those looking for true responsive politics need to focus on these states and pay special attention to the steps being taken.  If new leadership and new majorities are successful in not only taking the lead on pro-growth, de-regulatory, and business-friendly tax initiatives in the coming year, but in providing real tangible results for its citizens, then it could speak volumes in shaping the political landscape of these states for years to come.  Should the new leadership in these states be unsuccessful, Tuesday is as true a testament as any to the new attitudes of the electorate as a whole; one that demands results quickly and without excuses.

After all, even in our globally connected web 2.0 world, politics is still local.

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