In 2006,
Tennessee
Governor Perry
Phil Bredesen, Democrat
Legislature: Divided
passed a major
Grade: B
Took Office: January 2003
tax overhaul.
Governor Bredesen has generally avoided
major tax cuts, but he has supported modest
Homeowners
tax increases. After a four-year battle to impose
breaks such as reducing the sales tax on gro-
will receive
an income tax in Tennessee ended in 2002 with
ceries. When state budget gaps have appeared,
the state remaining income tax-free, Bredesen
Bredesen has focused on budget restraint,
property tax
wisely sided against the idea when he came to
including efforts to reduce state employment
relief, but the
office. The only substantial tax increase under
and rein in health care spending. Per capita
plan really socked
the governor was a 2007 increase in the ciga-
spending, however, has risen quickly at about 6
rette tax. The governor has not proposed any
percent annually during his tenure.
it to businesses.
Texas
Rick Perry, Republican
Legislature: Republican
Grade: B
Took Office: December 2000
Rick Perry inherited the governorship when
Tax." This new tax hit a much broader array of
George W. Bush became president in 2000, and
businesses and increased state-level taxes by
he was elected in 2002 on a pledge to oppose
more than $3 billion annually. That increase
tax increases. His adherence to that promise
and other state-level increases in the plan are
has been rather loose. In 2003, he supported
supposed to be more than offset by property
the enactment of a huge package of fee increas-
tax reductions. Homeowners will receive prop-
es and tax loophole closing measures. In 2004,
erty tax relief, but the plan really socked it to
he proposed swapping local property tax cuts
businesses. Further, the plan centralizes greater
for a large cigarette tax increase, with the effect
fiscal power at the state level, which will
of shifting more school funding to the state
encourage government growth in the long run
level. In 2005, he revised his plan, proposing to
by stifling local tax competition. Governor
cut property taxes in a swap for higher state
Perry has put in a better performance on the
sales taxes, cigarette taxes, and business taxes.
spending side of the budget. He proposed over-
In 2006, the governor passed a major business
all reductions in spending in a number of his
tax overhaul. The overhaul repealed the corpo-
budgets, and actual per capita spending has
rate franchise tax and replaced it with a modi-
risen at about 3 percent annually during his
fied gross receipts tax called the "Texas Margin
tenure.
Utah
Jon Huntsman Jr., Republican
Legislature: Republican
Grade: B
Took Office: January 2005
allowing individuals to choose between the reg-
Jon Huntsman ran for governor promising
ular income tax with a top rate of 7 percent, and
to reform the state's tax system, and he has pur-
an alternative flat tax with a lower rate. In 2007,
sued a variety of tax cuts. In 2005, he proposed
Huntsman and the legislature agreed to a sales
eliminating the corporate franchise tax, but was
unsuccessful. In 2006, he pushed through a plan
tax cut and a unified income tax system with a
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