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Best and Worst Governors 2018

October 10, 2018 in Economics

By Chris Edwards

Chris Edwards

The U.S. economy is booming, and state governments are
benefitting from strong revenue growth. Many governors are using
the opportunity to expand spending programs, while others are
cutting tax rates. Some governors are hiking taxes despite already
overflowing coffers.

Which governors are the most frugal and which the most
spendthrift? The Cato Institute’s new “fiscal report
card” calculates the answer based on recent tax and spending
changes, and assigns letter grades of “A” to
“F.”

The report awarded an “A” to five governors.

Susana Martinez of New Mexico has been steadfast in opposing tax
increases over eight years in office. Many GOP governors break
their promises not to raise taxes, but not Martinez. Last year, she
vetoed $350 million of tax hikes. She has also kept a lid on budget
growth and has repeatedly vetoed wasteful spending.

The focus of governors
should be delivering efficient state services at lower costs to
create budget room for competitive tax rates.

Henry McMaster of South Carolina is off to a conservative start
as governor since 2017. He has also vetoed tax hikes and proposed
cutting income tax rates across the board.

Doug Burgum of North Dakota entered office in 2017 after North
Dakota’s energy boom had turned to a bust. With falling state
revenues, Burgum pursued broad spending cuts to balance the budget,
not tax increases.

Paul LePage of Maine has been a staunch fiscal conservative over
eight years in office. He has restrained spending, reformed welfare
programs, and repeatedly cut taxes, including repealing a surtax on
high earners last year.

Greg Abbott of Texas has held the state budget flat in recent
years and pursued business tax reforms. He cut the state’s
damaging franchise tax and wants to cut it further until it
“fits in a coffin.”

The “A” governors are all Republicans, and the
overall results show that GOP governors are more fiscally
conservative than Democrats, on average. That party divide has
persisted over time on the Cato report cards, which are computed
every two years from objective tax and spending data.

Switching to the worst governors, the report awarded eight
F’s this year, with the two worst scores going to “left
coast” Democrats Kate Brown in Oregon and Jay Inslee in
Washington.

Spending has exploded under Brown, with the general fund budget
rising 14 percent in the past two-year cycle and 10 percent in the
current one. She supported a 2016 ballot measure to impose a gross
receipts tax to raise $3 billion a year. Oregon voters defeated the
measure by a 59-41 margin, but Brown ignored the anti-tax message
and signed into law large tax hikes in 2017.

Inslee’s appetite for tax …read more

Source: OP-EDS

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