P. 1
Fiscal Policy Report Card on America's Governors: 2004 Cato Policy Analysis No. 537

Fiscal Policy Report Card on America's Governors: 2004 Cato Policy Analysis No. 537

|Views: 1,156|Likes:
Published by Cato Institute
Executive Summary
As states continue to claw their way out of the worst state budget hole in years, this report presents the findings of the Cato Institute's seventh biennial fiscal policy report card on the nation's governors. The report card's grading is based on 15 objective measures of fiscal performance. Governors who have cut taxes and spending the most receive the highest grades. Those who have increased spending and taxes the most receive the lowest grades. Our analysis shows that states that keep tax rates low and restrain spending growth have the best economic performance and thus the best longterm fiscal health.

This year, four governors receive the grade of A: Arnold Schwarzenegger of California, Craig Benson of New Hampshire, Bill Owens of Colorado, and Judy Martz of Montana. Four governors receive Fs for their poor performance in dealing with the state fiscal crisis: Bob Holden of Missouri, Bob Taft of Ohio, Edward Rendell of Pennsylvania, and James McGreevey of New Jersey.

The grades of the governors of some of America
Executive Summary
As states continue to claw their way out of the worst state budget hole in years, this report presents the findings of the Cato Institute's seventh biennial fiscal policy report card on the nation's governors. The report card's grading is based on 15 objective measures of fiscal performance. Governors who have cut taxes and spending the most receive the highest grades. Those who have increased spending and taxes the most receive the lowest grades. Our analysis shows that states that keep tax rates low and restrain spending growth have the best economic performance and thus the best longterm fiscal health.

This year, four governors receive the grade of A: Arnold Schwarzenegger of California, Craig Benson of New Hampshire, Bill Owens of Colorado, and Judy Martz of Montana. Four governors receive Fs for their poor performance in dealing with the state fiscal crisis: Bob Holden of Missouri, Bob Taft of Ohio, Edward Rendell of Pennsylvania, and James McGreevey of New Jersey.

The grades of the governors of some of America

More info:

Published by: Cato Institute on Mar 26, 2009
Copyright:Attribution Non-commercial

Availability:

Read on Scribd mobile: iPhone, iPad and Android.
download as PDF, TXT or read online from Scribd
See more
See less

05/10/2014

pdf

text

original

Bob Holden, Democrat

Legislature: Republican
Took Office: January 2001

Grade: F

Fiscal
Performance Data
8.3%

Average Annual Change in Real per Capita Direct General Spending through 2002

7.4%

Average Annual Change in Direct General Spending per $1,000 Personal Income through 2002

1.9%

Average Annual Recommended Change in Real per Capita General Fund Spending through 2005

-5.4%

Average Annual Change in General Fund Spending per $1,000 Personal Income, 2002–2005

2.6%

Average Annual Change in Real per Capita Tax Revenue through 2002

-3.6%

Average Annual Change in Tax Revenue per $1,000 Personal Income through 2002

1.9%

Average Annual Recommended Change in General Fund Revenue per $1,000 Personal
Income through 2005

-2.3%

Average Annual Change in Real per Capita General Fund Revenue, 2002–2005

2.6%

Average Annual Recommended Tax Changes as % of Prior Year’s Spending through 2005

0.3

Change in Top Personal Income Tax Rate, proposed and/or enacted (% points)

1.3

Change in Top Corporate Income Tax Rate, proposed and/or enacted (% points)

12.3

2004 Combined Top Income Tax Rates, personal plus corporate

0.0

Change in Sales Tax Rate, proposed and/or enacted (% points)

0.0

Change in Gas Tax Rate, proposed and/or enacted (cents per gallon)

59

Change in Cigarette Tax Rate, proposed and/or enacted (cents per gallon)

Judy Martz left office after presiding over
four years of spending restraint and aggressive
supply-side tax cutting. Making clear her
opposition to tax increases from the first year
of her term—she had signed a pledge not to
raise taxes during her campaign—Martz
threatened to veto the tax increases that some
members of the legislature favored. She
repeated that threat throughout her time in
office. Her tax reform plan, proposed in early
2002, cut personal income tax rates by elimi-
nating the federal income tax deduction but
lowering the top state rate from 11 percent to
less than 7 percent. Montana had one of the
highest top income tax rates in the country
before Martz promoted and fought for that

much-needed reform. When the state encoun-
tered a series of deficits, Martz tended to favor
spending cuts and fund shifts to cover the dif-
ference. One main blemish on her record is
that she agreed to offset her tax cuts by
increases in the state cigarette tax and a levy on
rental cars and hotel rooms. She also had a
soft spot for tax credit incentives, which junk
up the tax code with superfluous special priv-
ileges for certain businesses. However, her tax
reform package is expected to result in a net
tax cut by 2006, and the overall positive
impact on the future of Montana’s economic
growth will be positive. Martz is a rare example
of a governor who left office with the state in
better shape than she found it.

46

You're Reading a Free Preview

Download
scribd
/*********** DO NOT ALTER ANYTHING BELOW THIS LINE ! ************/ var s_code=s.t();if(s_code)document.write(s_code)//-->