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John A. Kitzhaber of Oregon, Lawton Chiles of Florida, and

Mel Carnahan of Missouri.

Several trends uncovered in our report warrant special

mention.  First, there has been a clear trend toward more

spending at the state level since our last report card in

1996.  The national economic expansion has filled state cof-

fers with revenues, and many governors have recommended from

modest to major new expenditures of those windfall funds.

This year numerous governors--both Republicans and Demo-

crats--recommended increasing spending by more than 7 per-

cent, roughly three times the rate of inflation.  For the

past three years state spending has grown roughly 50 percent

faster than federal expenditures. The New York Times re-

cently headlined a report on the budget proposals of the

governors of northeastern states, "Spending, Not Tax-

Cutting, Draws Focus of Governors."  Political reporters

David Broder and Dan Balz of the Washington Post noted ear-

lier this year that GOP governors "have learned to be con-

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servative and pro-government at the same time."P

Many have

proposed the same types of spending initiatives that popu-

late Bill Clinton's budget requests.  Hence, in our opinion,

the talk of a dramatic fiscally conservative trend in the

states has been exaggerated.

Second, the governors elected in recent years (in par-

ticular those elected in 1993 and 1994) have tended to be

more aggressive in cutting taxes than those first elected

before 1993.  The top 8 governors in our report (and 14 of

the top 20) were elected in 1993 or 1994.  None of those new

governors has pushed for income tax hikes in their first

terms, and most have recommended tax cuts of one kind or an-

other.  Major income tax cuts have been enacted in New York

under George E. Pataki, Pennsylvania under Tom Ridge, Con-

necticut under John G, Rowland, Oklahoma under Frank Keat-

ing, and New Jersey under Christine Todd Whitman.  For this

reason, only two of the 1994 class of governors received a

grade worse than C.

Third, the northeastern states in particular have moved

in a most fiscally conservative direction in the last four

years--thus reversing the tax-and-spend policies of previous

governors, such as Lowell Weicker of Connecticut, Jim Florio

of New Jersey, Michael Dukakis of Massachusetts, and Mario

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Cuomo of New York.

Although the northeastern states are

still 20-30 percent above average in tax burden and per cap-

ita spending, as the trend toward pro-growth tax cutting has

continu4 d, their relative economic performance has im-

e

proved.