ture agreed in 2005 to cut the small busi-
The following section reviews the records
ness tax rate from 7 percent to 5 percent.
of the highest-scoring and lowest-scoring gov-
In 2007 Sanford signed into law sales tax
ernors, and then discusses some interesting
cuts and further income tax cuts. This
patterns that emerged from the analysis. After
year, the governor has proposed cutting
that, the outlook for state fiscal policy is dis-
income taxes through an optional 3.4
cussed, focusing on the coming crisis in state
percent flat tax. Sanford's proposed bud-
debt and unfunded obligations. Appendix A
gets have been frugal, and he has vetoed
discusses the report card methodology, and
hundreds of costly spending bills. He has
Appendix B provides a brief summary of the
also pushed for the state to adopt a legal
fiscal record of each governor.
·
cap on annual budget growth.
Joe Manchin of West Virginia has con-
Main Results
centrated on cutting business taxes to
help boost investment in his state. In
Table 1 presents the overall grades for the
2006, Manchin approved reductions in
governors. Scores ranging from 0 to 100 were
the business franchise and corporate
calculated for each governor based on seven tax-
income taxes. In 2007, he cut the fran-
Mark Sanford
and-spending variables, and then those scores
chise tax further. In 2008, Manchin
of South
were converted to the letter grades A to F.
signed into law a repeal of the business
franchise tax and a reduction in the cor-
Carolina is a
Highest-Scoring Governors
porate income tax rate. Manchin also has
strong supporter
The highest-scoring governors are those
an excellent spending record, and recom-
of spending
that proposed or signed into law major tax
mends cuts to the overall general fund
cuts, recommended budget restraint, and kept
budget most years.
restraint and
spending growth to a minimum. Here are the
pro-growth tax
three governors who received a grade of A:
Lowest-Scoring Governors
· Charlie Crist of Florida has helped push
The lowest-scoring governors are those
cuts.
that have increased taxes and spending the
through major property tax cuts in his
most. During boom years, they expanded pro-
year and a half in office. He signed into
grams with gusto, and when budget deficits
law a measure that required local govern-
appeared they raised taxes to avoid having to
ments to roll back a portion of recent
make spending trade-offs. Here are the eight
property tax increases, while capping
governors who received a grade of F:
· The
future tax increases for some types of
lowest-scoring governor, Martin
property. Crist also supported a success-
O'Malley of Maryland, spearheaded the
ful ballot measure that expanded home-
passage of a $1.4 billion tax increase in
stead exemptions and established other
2007, which was unique in its large size
property tax breaks. These relief mea-
sures are complex and they create some
and scope. It increased the corporate tax
distortions, but they will save Florida tax-
rate, the top personal income tax rate, the
payers billions of dollars.4 On spending,
sales tax rate, and the cigarette tax rate. It
Governor Crist has promoted restraint--
also expanded the sales tax base and
his two budgets have proposed roughly
raised taxes on vehicles. This enormous
flat spending and he has not hesitated in
increase will hit Marylanders directly in
·
vetoing wasteful pork projects.
the pocketbook, and indirectly through
· Ted Kulongoski of Oregon has been
Mark Sanford of South Carolina is a
slower economic growth over time.
strong supporter of spending restraint
and pro-growth tax cuts. He has pushed
relentless in his advocacy of tax increases
for income tax rate cuts, and the legisla-
since coming to office in 2003. In his first
3