In recent years, elections for governor in New Jersey and Virginia have offered dead-on forecasts of national political trends. Maybe this year, too.

In 1989, the New Jersey and Virginia elections foreshadowed the unraveling of the Reagan-Bush majority. Both states had voted for Ronald Reagan in the 1980 and 1984 presidential elections and for George Bush in 1988. In 1989, however, both states elected Democratic governors. James J. Florio carried New Jersey with an impressive 61 per cent, while Virginia made L. Douglas Wilder the nation's first elected black governor.

The decisive issue that year was abortion. In July 1989, the Supreme Court handed down the Webster decision, which invited states to limit abortion rights. All over the country, voters who favor abortion rights were outraged--and energized. Amazingly, in a race between a black candidate and a white one, abortion was the issue that mattered most to Virginia voters, according to the exit polls. In New Jersey, 41 per cent of voters said they ''could never vote for a candidate who disagrees with my position on abortion.'' They voted more than 2-1 for Florio.

The only issue that mattered more to New Jersey voters in 1989 was auto insurance premiums--then, as now, higher than in any other state. Florio promised tougher regulation of insurers. The Republican candidate called for deregulation. Voters concerned about auto insurance rates voted overwhelmingly for Florio.

The Florio and Wilder victories presaged the 1992 Democratic comeback. Those races exposed the weaknesses in the GOP presidential coalition: the split in its ranks over abortion, and voters' willingness to endorse government action--in this case, regulation--to deal with a real and specific problem. In 1992, both problems were magnified in President Bush's reelection campaign: his Administration's failure to take action on a sagging economy, and his party's vulnerability on social issues, displayed so vividly at the Republican National Convention in Houston.

The 1993 races in New Jersey and Virginia foretold the huge anti-Democratic tide that swept the country a year later. In both states, Republicans regained control with bold plans that highlighted Democratic vulnerabilities. In Virginia, where crime was the No. 1 issue, George F. Allen vowed to abolish parole for violent criminals. His Democratic opponent, the state's attorney general, denounced the proposal as unrealistic. Virginians concerned about crime voted 2-1 for Allen.

New Jersey voters were still angry about Florio's $2.8 billion tax hike, passed in 1990. Christine Todd Whitman, his Republican challenger, capitalized on their dander with a daring, last-minute campaign promise to cut New Jersey income taxes by 30 per cent. New Jersey voters concerned about taxes voted for Whitman 3-1 over Florio.

Both Whitman and Allen delivered on their campaign promises. Nevertheless, this year's Virginia and New Jersey races are turning out to be surprisingly close. Republicans are worried. Of the seats up next year for governor, Senator and House Member, a majority have Republican incumbents. Just like the statehouses in New Jersey and Virginia.

Republicans seem to have two terrific issues going for them--incumbency and taxes. With the economy steaming along in its seventh year of expansion, it looks like a wonderful time for incumbents. New Jersey has gained 196,000 new jobs since Whitman took office. And while Allen is barred from running for another term, his high job ratings in Virginia ought to boost the candidacy of Republican James S. Gilmore III.

Moreover, Whitman has cut taxes 14 times in New Jersey, bestowing on taxpayers a savings of more than $4 billion. In Virginia, Gilmore has promised to abolish the personal property tax on automobiles, the state's most hated tax. So why are the two Republicans in trouble? Democrats in both states have adopted a Clinton strategy: Identify urgent problems and make the case for government action without tax hikes. In New Jersey, Democrat James E. McGreevey has latched onto the same issue that paid off for Florio eight years ago--auto insurance. In 1997, as in 1989, Republicans are paying a price for ideological resistance to government regulation.

Both McGreevey and Virginia Democratic candidate Donald S. Beyer Jr. are running hard on the education issue. McGreevey has promised to cut New Jersey's soaring property tax burden by providing more state funding for schools. Beyer says he's committed to a major investment in education to make Virginia schools the best in the nation.

Where's the money going to come from to pay for these new public initiatives? Simple: higher revenues from the states' booming economies. No need to raise taxes. The choice materializing for voters in New Jersey and Virginia this year-- and next year, for voters across the nation--is this: Should the proceeds of a strong economy be returned to taxpayers in the form of continuing tax cuts, or should they be invested in public priorities like education?

Republicans are betting their future on tax cuts: Give people their money back and let them solve their problems for themselves. Democrats are betting that the tax cut issue has run its course and that they can sell public investment in high- priority problems. On Nov. 4, we'll see which bet pays off.