Policy Analysis No. 257

A Fiscal Policy Report Card on America’s Governors: 1996

By Stephen Moore and Dean Stansel
July 26, 1996

Executive Summary

This study presents an objective, comparative analysis of the spending and tax policies of 46 of America’s governors. It is a report card on their fiscal conservatism. Governors who have cut spending and taxes the most get the highest grades; governors who have raised spending and taxes the most get the lowest grades.

For each of the governors who took office before 1993, we constructed a 14-variable index of fiscal performance. Those variables measure the change in state spending, tax burdens, and tax rates during each governor’s tenure. For the 20 governors who were first elected in 1993 or 1994, we explore similar, but fewer, fiscal policy variables based on budget and tax changes proposed and enacted for fiscal 1996 and 1997.

In general, we find that the states have moved dramatically in a fiscally conservative direction since 1994, with most states cutting taxes and holding general fund expenditures at or below inflation in 1995 and 1996. Three governors had outstanding records of fiscal restraint and received an A grade on our Report Card: George Pataki of New York, Steve Merrill of New Hampshire, and Fife Symington of Arizona. Four governors received an F: Gaston Caperton of West Virginia, Tom Carper of Delaware, Lawton Chiles of Florida, and George Voinovich of Ohio. Other prominent governors and their grades are William Weld of Massachusetts, B; Tommy Thompson of Wisconsin, B; John Engler of Michigan, B; Evan Bayh of Indiana, B; Christine Todd Whitman of New Jersey, B; Tom Ridge of Pennsylvania, B; Pete Wilson of California, C; and Jim Edgar of Illinois, D. With few exceptions, the 16 Republican governors elected in 1993 and 1994 have admirable records of supply-side tax cuts and budget downsizing.

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Stephen Moore is director of fiscal policy studies and Dean Stansel is a fiscal policy analyst at the Cato Institute.