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Club for Growth White Paper on Johnson

Club for Growth White Paper on Johnson

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12012 Presidential White Paper #9July 21, 2011
Former New Mexico Governor Gary JohnsonINTRODUCTION
Gary Johnson was elected Governor of New Mexico in 1994, and served from 1995 to 2003.Since Johnson has never served in Congress, he does not have a rating by the Club for Growth.However, the Cato Institute, a free market think tank, produces a biennial scorecard on thenation’s governors based on their tax and spending policies and actions. Over his eight years asGovernor, Gary Johnson’s scores were:2002 – “B”2000 – “B”1998 – “B”1996 – “B”
TAXES
The Club for Growth is committed to lower taxes – especially lower tax rates – across the board.Lower taxes on work, savings, and investments lead to greater levels of these activities, thusencouraging greater economic growth
.Overall, Governor Johnson has an excellent record on taxes and consistently pushed for tax cutsdespite having to deal with the liberal New Mexico Legislature. Late in his second term, theCato Institute found that Johnson was one of “four governors proposing or enacting the largestincome tax rate cuts during their tenures.”
1
 In his first term, Governor Johnson proposed reducing the top rate of the state personal incometax from 8.5% to 8%, along with other tax cuts, but was rebuffed by the Legislature.
2
He signeda repeal of a 1993 6-cent-a-gallon tax hike.
3
In 1997, Governor Johnson again proposed to cut
1
Cato Institute, A Fiscal Policy Report Card on America’s Governors: 2002
2
Cato Institute, A Fiscal Policy Report Card on America’s Governors: 1996
3
Santa Fe New Mexican, 3/10/95
 
2
the top rate, this time to 8.3%. The legislature proposed to cut it to 8.2%, but offset some othe revenue losses from this and other tax cuts with a cigarette tax increase. According to Cato,Johnson signed the income tax cut, and “vetoed the cigarette tax hike.”
4
 Unlike some of the other Republican candidates for President this year and in past electioncycles, Gary Johnson never raised the cigarette tax. While the tax on cigarettes has littlerelevance to economic growth, the fact that he held the line on such taxes demonstrates howstrongly he opposes tax hikes. In 1999, he vetoed a 12-cent-a-pack cigarette tax hike —“notbecause he liked smoking, he says, but because he opposes all tax hikes.”
5
New Mexico’scigarette tax rate stayed the same from 1995 to 2003.
6
 In 2001, Governor Johnson vetoed a bill to cut the top income tax rate from 8.2% to 7.7%because it also lowered the dollar amount that the top rate kicked in.
7
His proposal would havecut the income tax by $72 million while the legislature wanted just a $32 million cut and a $30.5million one-time rebate. Johnson later said he regretted vetoing the legislature’s version.
8
Overthe course of his two terms, Governor Johnson “cut the state income tax, the gasoline tax, thestate capital gains tax, and the unemployment tax.”
9
 As a candidate for President, Governor Johnson has indicated his support for a flat tax.
10
Healso supports eliminating the corporate income tax.
11
He called the 2010 deal to temporarilyextend the Bush tax cuts for two years “not a good one” because it didn’t make thempermanent.
12
 
SPENDING
The Club for Growth is committed to reducing government spending. Less spending enhanceseconomic growth by enabling lower taxes and diminishing the government’s economically inefficient allocation of resources
.Governor Johnson was one of the most anti-spending governors in New Mexico history.Governor Johnson set a state record for vetoes as Governor, earning the title “Governor No”after 742 total vetoes of bills over two terms.
13
In an interview with John Stossel on
Fox News,
4
Cato Institute, A Fiscal Policy Report Card on America’s Governors: 1998, page 57.
5
Cato Institute, A Fiscal Policy Report Card on America’s Governors: 2000
6
Campaign for Tobacco-Free Kids, “Tobacco Tax Increases Are A Reliable Source of Substantial New Sate Revenue,”12/19/08
7
New Mexico Senate Executive Message No. 44, 4/5/01
8
Associated Press, 3/4/02
9
Cato Institute, A Fiscal Policy Report Card on America’s Governors: 2002
10
ABC News “The Note”, 2/9/10
11
GaryJohnson2012.com
12
Daily Caller, 12/14/10
13
Las Cruces Sun-News, 4/3/11
 
3
Governor Johnson bragged that one of his veto messages was “I’m vetoing this piece of legislation because it’s just way too long and we don’t understand what it says.”
14
 Governor Johsnon looked for private alternatives to the infrastructure spending that too oftenbusts state budgets. For example, Highway 44 between Albuquerque and Farmington was“designed, financed, built, and guaranteed by a private company.”
15
 In 2000, he refused to sign a budget and forced a special session with the legislature overfunding priorities, a battle which ended with Johnson signing a $3.5 billion dollar budget butvetoing several small spending priorities such as $5 million on expanded Medicaid.
16
Hethreatened to shut down state government when the legislature fought him and eventhreatened to let prisoners out of jail if the state couldn’t afford to house them.
17
 On federal issues, Governor Johnson says he would have opposed TARP. “Government shouldnot have been involved in this…Why should Goldman and AIG be saved but not Lehman?”
18
Healso wants to eliminate government subsidies for Fannie Mae and Freddie Mac.
19
He says hewould have voted against the stimulus.
20
 He has said that he would cut the federal budget by 43%, “Start out with the big four -Medicaid, Medicare, Social Security and defense,” Johnson said in New Hampshire in early2011.
21
 
ENTITLEMENT REFORM
 America’s major middle-class entitlement programs are already insolvent. The Club for Growthsupports entitlement reforms that enable personal ownership of retirement and health care programs, benefit from market returns, and diminish dependency on government.
Governor Johnson has an excellent record of holding down the exploding growth of entitlementprograms that now cripple state budgets. As Governor, Johnson presided over the beginning of managed care for Medicaid recipients in New Mexico and pushed for speedy implementation.
22
 The managed care program (known as Salud!) replaces fee-for service and coversapproximately two-thirds of available services under Medicaid.
23
Salud! has generally been
14
Fox News,http://www.youtube.com/watch?v=Hx-i_UUg8K8 
15
Reason Magazine, January 2001
16
Associated Press, 4/13/00
17
Stateline, 3/14/00
18
Republican Liberty Caucus interview, 1/19/10,http://www.rlc.org/2010/01/19/interview-with-governor-gary-earl-johnson/ 
19
GaryJohnson2012.com
20
Reason Magazine, April 2010
21
Concord Monitor, 1/13/11
22
“Health Policy for Low-Income People in New Mexico,” The Urban Institute, November 1998
23
“Concise Guide to New Mexico Medicaid”, New Mexico Hospital Association, November 2008

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