#limited government

Policymakers in every state should adopt the fiscal approaches of this year’s top-scoring governors…

Today, the Cato Institute released its biennial Fiscal Policy Report Card on America’s Governors, produced by Chris Edwards, director of tax policy studies and editor of www.DownsizingGovernment.org.The report uses statistical data to grade the governors on their taxing and spending records from a limited-government perspective.

Five governors received the highest grade of “A”: Susana Martinez of New Mexico, Henry McMaster of South Carolina, Doug Burgum of North Dakota, Paul LePage of Maine, andGreg Abbott of Texas.

Eight governors received the lowest grade of “F”: Roy Cooper of North Carolina, John Bel Edwards of Louisiana, Tom Wolf of Pennsylvania, Jim Justice of West Virginia, David Ige of Hawaii, Dennis Daugaard of South Dakota, Kate Brown of Oregon, and Jay Insleeof Washington. 

The report card looks at data since 2016 for each state and awards an objective grade based on spending variables, a revenue variable, and tax rate variables. Governors who have cut taxes and spending the most receive the highest grades, while those who have increased taxes and spending the most receive the lowest grades.

Susana Martinez receives the highest score in this year’s report due to her spending restraint, tax cuts, and steadfast opposition to tax increases. New Mexico’s budget has remained roughly flat in recent years, and Martinez has repeatedly vetoed wasteful spending. She has pursued reforms to make New Mexico more competitive, including cutting the corporate tax rate. With revenues from energy production stagnant in recent years, balancing New Mexico’s budget has been a challenge. But Martinez has held firm against tax increases proposed by the legislature, including vetoing $350 million worth of tax increases last year.

Jay Inslee is the worst-scoring governor this year. The report argues that his “appetite for tax and spending increases has been insatiable.” Though he originally campaigned on a promise not to raise taxes, Inslee has pushed many hikes over the years, including increases in business taxes, capital gains taxes, cigarette taxes, sales taxes, and a huge new carbon tax. Inslee has also been spendthrift— the current biennial budget in Washington state is up 17 percent over the prior budget.

In this year’s report, Edwards discusseshow the federal Tax Cuts and Jobs Act of 2017 is affecting state fiscal environments. He also examines revenues from marijuana legalizationandrecent Supreme Court decisions on online sales taxes and public-sector labor unions.

Edwards notes, “The 2017 federal tax act has ushered in a new era of state tax competition. Governors need to lead efforts to deliver better services at lower costs, else risk losing residents to other states. Policymakers in every state should adopt the fiscal approaches of this year’s top-scoring governors.”

Read the report, then join the conversation on Twitter with #GovReportCard…