No. 668
September 30, 2010
Fiscal Policy Report Card
on America's Governors: 2010
by Chris Edwards
Executive Summary
Illinois, Jim Doyle of Wisconsin, Bill Ritter of
State governments have had to make tough
Colorado, and Chris Gregoire of Washington.
budget choices in recent years. Tax revenues have
Many states have raised taxes the past two
stagnated as a result of the poor economy, and
years, which has hurt families and businesses at a
that has prompted governors to take a variety of
time when they are already struggling because of
fiscal actions to close large budget gaps. Some
the slow economy. Across the 50 states, recent
governors have cut spending to balance their
tax increases have been by far the largest in many
budgets, while others have pursued large tax
years. Many states raised taxes even though the
federal government showered them with billions
That is the backdrop to this 10th biennial fis-
of dollars of added funding in last year's "stimu-
cal report card of the governors, which examines
lus" bill.
state budget actions since 2008. It uses statistical
To their credit, many governors have trimmed
data to grade the governors on their taxing and
their budgets to match lower revenue levels. But
spending records--governors who have cut taxes
overall state debt levels have doubled during the
and spending the most receive the highest
past decade, and many states face giant funding
grades, while those who have increased taxes and
gaps in their pension and health care plans.
spending the most receive the lowest grades.
Further budget cuts are needed to deal with
Four governors were awarded an "A" in this
these problems. At the same time, rising compe-
report card--Mark Sanford of South Carolina,
tition in the global economy calls for the states
Bobby Jindal of Louisiana, Tim Pawlenty of
to reduce their business taxes to attract invest-
Minnesota, and Joe Manchin of West Virginia.
ment. America needs a lot more "A" governors to
Seven governors were awarded an "F"--Ted
face these fiscal challenges and make the needed
Kulongoski of Oregon, David Paterson of New
tax and spending reforms.
York, Jodi Rell of Connecticut, Pat Quinn of
Chris Edwards is director of tax policy studies at the Cato Institute and editor of Cato's Amy Mandler assisted in preparing this report.