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No. 315

September 3, 1998

A FISCAL POLICY REPORT CARD ON AMERICA'S GOVERNORS: 1998

by Stephen Moore and Dean Stansel

Executive Summary

This report presents the findings of the Cato Institute's

fourth biennial fiscal policy report card on the nation's

governors.  The grading mechanism is based on purely objec-

tive measures of each governor's fiscal performance.  Those

governors with the most fiscally conservative records--the

tax and budget cutters--receive the highest grades.  Those

who have increased spending and taxes the most receive the

lowest grades.

Two governors receive an A on our 1998 report card: Wil-

liam Janklow of South Dakota and John Rowland of Connecticut.

Three governors receive the grade of F: John Kitzhaber of

Oregon, Lawton Chiles of Florida, and Mel Carnahan of Mis-

souri.

The governors of America's most populous states and their

grades are Pete Wilson of California, C; George W. Bush of

Texas, B; George Pataki of New York, B; Tom Ridge of Pennsyl-

vania, B; Jim Edgar of Illinois, D; George Voinovich of Ohio,

D; John Engler of Michigan, B; and Christine Todd Whitman of

New Jersey, B.

There has been a clear trend toward more spending at the

state level during the past two years.  This year many gover-

nors recommended budget increases of more than 7 percent,

roughly three times the rate of inflation.  Since 1996 state

spending has grown roughly 50 percent faster than federal ex-

penditures.  Inflated budgets are now being promoted even by

Republican governors who came into office in 1994 and 1995

promoting tax-cutting agendas.  In our 1996 report we noted

that the governors had moved states in a pronounced fiscally

conservative direction.  Now we are much less sanguine.

_____________________________________________________________

Stephen Moore is director of fiscal policy studies at the

Cato Institute.  Dean Stansel is a fiscal policy analyst at

Cato.