Romney was sworn in as the 70th governor of Massachusetts on January 2, 2003. Both houses of the Massachusetts state legislature held large Democratic majorities. He picked his cabinet and advisors more on managerial abilities than partisan affiliation. Upon entering office in the middle of a fiscal year, Romney faced an immediate $650 million shortfall and a projected $3 billion deficit for the next year. Unexpected revenue of $1.0–1.3 billion from a previously enacted capital gains tax increase and $500 million in unanticipated federal grants decreased the deficit to $1.2–1.5 billion. Through a combination of spending cuts, increased fees, and removal of corporate tax loopholes, by 2006 the state had a $600–700 million surplus.
Official Massachusetts State House portrait of Governor Mitt Romney, by artist Richard Whitney
Romney supported raising various fees by more than $300 million, including those for driver's licenses, marriage licenses, and gun licenses. Romney increased the state gasoline fee by 2 cents per gallon, generating about $60 million per year in additional revenue. Romney also closed tax loopholes that brought in another $181 million from businesses over the next two years.
The state legislature, with Romney's support, also cut spending by $1.6 billion, including $700 million in reductions in state aid to cities and towns. The cuts also included a $140 million reduction in state funding for higher education, which led state-run colleges and universities to increase tuition by 63 percent over four years. Romney sought additional cuts in his last year as Massachusetts governor by vetoing nearly 250 items in the state budget, but all of them were overridden by the Democratic-dominated legislature.
The combined state and local fee burden in Massachusetts increased during Romney's governorship but still was below the national average. According to the Tax Foundation, that per capita burden was 9.8 percent in 2002 (below the national average of 10.3 percent), and 10.5 percent in 2006 (below the national average of 10.8 percent).
Romney was at the forefront of a movement to bring near-universal health insurance coverage to the state, after a business executive told him at the start of his term that doing so would be the best way he could help people and after the federal government, due to the rules of Medicaid funding, threatened to cut $385 million in those payments to Massachusetts if the state did not reduce the number of uninsured recipients of health care services. Despite not having campaigned on the idea of universal health insurance, Romney decided that because people without insurance still received expensive health care, the money spent by the state for such care could be better used to subsidize insurance for the poor.
After positing that any measure adopted not raise taxes and not resemble the previous decade's failed "Hillarycare" proposal, Romney formed a team of consultants from different political backgrounds that beginning in late 2004 came up with a set of innovative proposals more ambitious than an incremental one from the Massachusetts Senate and more acceptable to him than one from the Massachusetts House of Representatives that incorporated a new payroll tax. In particular, Romney successfully pushed for incorporating an individual mandate at the state level. Past rival Ted Kennedy, who had made universal heath coverage his life's work and who over time developed a warm relationship with Romney, gave Romney's plan a positive reception, which encouraged Democratic legislators to work with it. The effort eventually gained the support of all major stakeholders within the state, and Romney helped break a logjam between rival Democratic leaders in the legislature.
On April 12, 2006, Romney signed the resulting Massachusetts health reform law, which requires nearly all Massachusetts residents to buy health insurance coverage or face escalating tax penalties such as the loss of their personal income tax exemption. The bill also establishes means-tested state subsidies for people who do not have adequate employer insurance and who make below an income threshold, by using funds previously designated to compensate for the health costs of the uninsured. He vetoed eight sections of the health care legislation, including a controversial $295-per-employee assessment on businesses that do not offer health insurance and provisions guaranteeing dental benefits to Medicaid recipients. The legislature overrode all eight vetoes; Romney's communications director Eric Fehrnstrom responded by saying, "These differences with the Legislature are not essential to the goal of getting everyone covered with insurance. Romney said of the measure overall, "There really wasn't Republican or Democrat in this. People ask me if this is conservative or liberal, and my answer is yes. It's liberal in the sense that we're getting our citizens health insurance. It's conservative in that we're not getting a government takeover. The law was the first of its kind in the nation and became the signature achievement of Romney's term in office.
Governor Mitt Romney poses with a prototype of a $100 laptop in September 2005, after filing a proposal to give one to every public middle and high school student in Massachusetts. The legislation did not pass.
At the beginning of his governorship, Romney opposed same-sex marriage and civil unions, but advocated tolerance and supported some domestic partnership benefits. Faced with the dilemma of choosing between same-sex marriage or civil unions after the November 2003 Massachusetts Supreme Judicial Court decision legalizing same-sex marriages (Goodridge v. Department of Public Health), Romney reluctantly backed a state constitutional amendment in February 2004 that would have banned same-sex marriage but still allow civil unions, viewing it as the only feasible way to ban same-sex marriage in Massachusetts. In May 2004 Romney instructed town clerks to begin issuing marriage licenses to same-sex couples, but citing a 1913 law that barred out-of-state residents from getting married in Massachusetts if their union would be illegal in their home state, no marriage licenses were to be issued to out-of-state same-sex couples not planning to move to Massachusetts. In June 2005, Romney abandoned his support for the compromise amendment, stating that the amendment confused voters who oppose both same-sex marriage and civil unions. Instead, Romney endorsed a petition effort led by the Coalition for Marriage & Family that would have banned same-sex marriage and made no provisions for civil unions. In 2004 and 2006 he urged the U.S. Senate to vote in favor of the Federal Marriage Amendment.
In 2005, Romney revealed a change of view regarding abortion, moving from an "unequivocal" pro-choice position expressed during his 2002 campaign to a pro-life one where he opposed Roe v. Wade. He vetoed a bill on pro-life grounds that would expand access to emergency contraception in hospitals and pharmacies.
Romney generally used the bully pulpit approach towards promoting his agenda, staging well-organized media events to appeal directly to the public rather than pushing his proposals in behind-doors sessions with the state legislature. Romney was especially effective in dealing with a crisis of confidence in Boston's Big Dig project following a fatal ceiling collapse in 2006, wresting control of the project from the Massachusetts Turnpike Authority and helping ensure that it would eventually complete.
During 2004, Romney spent considerable effort trying to bolster the state Republican Party, but it failed to gain any seats in the state legislative elections that year. Given a prime-time appearance at the 2004 Republican National Convention, Romney was already being discussed as a potential 2008 presidential candidate. Midway through his term, Romney decided that he wanted to stage a full-time run for president, and on December 14, 2005, Romney announced that he would not seek re-election for a second term as governor. As chair of the Republican Governors Association, Romney traveled around the country, meeting prominent Republicans and building a national political network; he spent part or all of more than 200 days out of state during 2006, preparing for his run. Romney's frequent out-of-state travel contributed towards his approval rating declining in public polls towards the end of his term. He conceded that 2006 would be a difficult year for Republicans and that they would likely lose gubernatorial seats, including possibly his own. The weak condition of the Republican state party was one of several factors that led to Democrat Deval Patrick's lopsided win over Republican Kerry Healey in the 2006 Massachusetts gubernatorial election.
Romney filed to register a presidential campaign committee with the Federal Election Commission on his next-to-last day in office as governor. Romney's term ended January 4, 2007.
Family life of Mitt Romney,
Romney's 1994 U.S. senat ,
Electoral history of Mitt Romney
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