America’s political discourse has grown so Washington-centric that coverage of the 2010 elections tended to focus overwhelmingly on the fight for control of Congress and what the results would mean for President Obama. But the most dramatic play-out of the election is likely to be felt in the states, where arrangements are made to deliver social services, transportation policy is set and schools are funded. Forty-four states are experiencing record budget deficits, yet most now have governors and legislators who won election on promises to cut taxes and spending in ways that will leave the most vulnerable Americans in desperate straits.

The Republican wave was not merely a federal phenomenon. It swept away Democratic dominance of the states at a time when budget shortfalls demand leaders willing to make courageous and humane choices on taxes, spending and government priorities. Republicans picked up at least ten governorships and a staggering eighteen legislative chambers from the Democrats, who started Tuesday with 800 more state legislative seats (out of 7,382) than the Republicans. By the end of the day the GOP held an advantage of at least 500 seats, and their numbers were growing as the count continued. "The Republican wave in the states is perhaps even stronger than it is at the federal level," says Tim Storey, a senior fellow with the National Conference of State Legislators, who calculated that the GOP would hold more state seats than at any time since 1928.

It may be true that some of the new GOP governors and legislators will make the case for federal aid to ease the dire circumstance of states (the Center on Budget and Policy Priorities estimates they have a total deficit of $112 billion), but the money will not come easily from a House packed with new members elected on promises to slash federal spending. And that Congress could get even more Republican; the election empowered partisan cadres who will use the upcoming redistricting process to draw dozens of new GOP-friendly Congressional districts.

The picture is not entirely dark for Democrats and progressives, however. Jerry Brown’s return to California’s governorship was a big win for the party, as was Andrew Cuomo’s election to New York’s top job. The party might keep a big-state governorship in Illinois as well, but only if Democrat Pat Quinn holds on to an exceptionally narrow lead. The victory of Denver Mayor John Hickenlooper, one of the country’s more innovative local leaders, over divided Republican opposition in the race for Colorado’s governorship provided a rare and reassuring victory in a key Western state. Vermont State Senator Peter Shumlin’s election put a Democrat in charge of Vermont for the first time since Howard Dean held the job; Shumlin is a backer of single-payer healthcare who promised to shutter the troubled Vermont Yankee nuclear power plant. And the victory of Rhode Island independent Lincoln Chafee, a former Republican senator who ran as a White House–saluted "friend" of Barack Obama, was especially encouraging, because Chafee recognizes the need to raise some taxes in order to maintain public services and schools.

There were also hopeful wins in races for powerful attorneys general posts. Activist Democrat Eric Schneiderman scored what he described as an "improbable victory" in New York over free-spending opposition from Republican and corporate interests. And it appears that San Francisco District Attorney Kamala Harris could win her state’s top law-enforcement job, despite a determined effort by shadowy groups associated with GOP political czar Karl Rove to prevent the election of a Democrat who has been pegged as one of the party’s rising stars.

But the bright blue spots were rare on an electoral map that went red across broad swaths of the country. The Republicans are now positioned to alter the Congressional landscape dramatically by redrawing districts that tilt toward the GOP. With total control (of governorship and both legislative chambers) of nineteen states—including Wisconsin, Michigan, Indiana, Ohio, Pennsylvania, Florida, Arizona and Texas—and legislative dominance in at least three states with Democratic governors, Republicans could draw dozens of seats ripe for their party’s picking in 2012. "The fight for the House continues next year," said Mississippi Governor Haley Barbour, chair of the Republican Governors Association and a potential 2012 presidential candidate.

When it comes to redistricting, the Republican gains this year create a darker scenario for Democrats than the GOP gubernatorial gains of 1994. As Chris Jankowski, executive director of the Republican State Leadership Council’s REDMAP project, explained the day after the election, the 1994 gains came after that decade’s redistricting process had played out. This time, says Jankowski, "it’s happening going into the redistricting process, rather than in the wake of a redistricting process."

Redistricting will challenge Democrats and almost certainly require expensive court battles. Ultimately, Democrats would be wise to embrace and advance redistricting reforms, such as those proposed by Common Cause and other good-government groups. Voters like the idea of taking control of the drawing of district lines. In California they voted 61 to 39 for a state ballot proposition that expands the role of the state’s Citizens Redistricting Commission, tasking the independent body—which is already involved in drawing State Assembly, State Senate and Board of Equalization district lines—with drawing Congressional district lines. Unfortunately, arguing for fairness and responsible, voter-friendly approaches may not get very far with the new leadership of most American states.