Racco was elected to the city council of Vaughan, Ontario in 1982, and retained this position until his election to the Ontario legislature. He ran for the federal Liberal nomination in Markham--Whitchurch--Stouffville in 1993, but lost to Jag Bhaduria under controversial circumstances.
In the 2003 provincial election, Racco defeated Susan Kadis for the Liberal nomination in Thornhill and ran against Tina Molinari, an incumbent from the Progressive Conservatives. Denominational education was a leading issue in this campaign, with Molinari supporting tax credits for non-Catholic religious education and Racco opposing it; some prominent members of Thornhill's Orthodox Jewish community supported Molinari because of this issue. Racco eventually won by 796 votes, a narrower margin of victory than most Liberal candidates achieved in neighbouring ridings.
Racco is a leading supporter of allowing municipalities to use red light camera technology for safety purposes. In 2004, he was the driving force behind the construction of a new statue of Pierre Trudeau in Vaughan.
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