Taxes Loom Large in Race For Granite State Governor

DEMOCRATIC gubernatorial candidate Joseph Grandmaison is out to break tradition here: He is urging New Hampshirites to vote Democratic. But in this conservative state, which is leaning strongly toward incumbent Republican Gov. Judd Gregg, even Mr. Grandmaison admits it will be tough.

``The majority of the people seem to believe that they're serving their interest well to walk in and and blindly vote Republican,'' he says. ``I have to get them to take three steps back to look at the individual that they'll be voting for.''

Grandmaison, former chairman of the New Hampshire Democratic Party, is campaigning on tax reform, economic development, and abortion rights. But political observers agree he's in for a tough fight against Governor Gregg, a conservative and a foe of abortion. The former four-term United States congressman has emerged unscathed after the booming economy took a nose dive last year. In fact, political observers see Gregg as the only New England incumbent governor favored for reelection during a regional recession.

Democratic leaders admit that Grandmaison, who won a close three-way primary race, is the underdog.

``It's going to be an uphill battle,'' says James Desler, spokesman for the National Democratic Committee. The most recent poll by the American Research Group of Manchester, N.H., shows 54 percent in favor of Gregg, 21 percent for Grandmaison, and 25 percent undecided.

Here in the Granite State, there are virtually no sales or income taxes and debate has focused on the sky-high property-tax rate. Grandmaison, who says property taxes have doubled over the last four years, is pushing for tax reform through property-tax relief. He refuses to specific, however, on his reform plan.

Gregg criticizes him for dodging the issue and for his refusal to take the New Hampshire Union Leader newspaper ``pledge,'' a promise to veto any sales or income tax. In a recent debate he said, ``Which will it be Joe, a sales tax or an income tax?''

Gregg likes to point out that New Hampshire has the lowest overall tax burden of any state in the country, despite its high property-tax rate.

Yet observers agree Grandmaison is putting up a good fight in the race. The incumbent governor is still vulnerable, particularly on the economy. Republicans, as well as Democrats, are critical of Gregg's seeming lackadaisical attitude about it, say political experts.

``He's just laid back. He's not very aggressive,'' says Robert Craig, University of New Hampshire associate political science professor.

Gregg counters by making an issue of Grandmaison's ties to Democratic Gov. Michael Dukakis (D) of Massachusetts. Governor Dukakis, criticized for what some consider his liberal ``tax and spend'' policies, is blamed for the state's current fiscal crisis. Grandmaison worked on Dukakis's first campaign for governor in 1974.

In addition to the governor's race, the US Senate race here is drawing a great deal of attention. GOP candidate Rep. Bob Smith faces feisty opponent John Durkin for the seat being vacated by Sen. Gordon Humphrey (R). The latest poll by American Research Group shows the conservative Mr. Smith ahead with 39 percent, Mr. Durkin holding 35 percent, and 26 percent undecided.

Both candidates have Washington experience: Durkin in the Senate and Smith in the House of Representatives. The race has been livened by Durkin's humorous rhetoric and occasional barbed comments.

``Durkin is funny, loquacious, has a wide ranging mind and an unrestrained tongue,'' says Richard Winter, chairman of the government department at Dartmouth College.

Durkin has tried to make an issue out of his refusal to accept campaign money from political-action committees. He is abiding by the state's voluntary campaign spending limit of $400,000 for the primary and the same amount for the general election.