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Governors who

Introduction

broad fiscal policy category--spending, rev-

enue, and tax rates. Appendix D provides a

cut taxes and

summary of the record of each governor in

The fiscal news has finally turned good

spending the

this year's report.

for most state policymakers. The improving

most receive the

national economic condition has reversed

the fiscal fortunes of most states. Gone are

highest grades.

Main Results

the reports of massive budget deficits that

Those who raised

equaled $265 billion in total between 2001

and 2005. This year at least 42 states will end

Tables 1 presents the grades for each gov-

taxes and

the fiscal year with a budget surplus. In total,

ernor. Governors have been graded on their

spending the

states are estimated to be in the black by

performance during their current term in

most receive the

$28.9 billion.1

office. Past Cato report cards awarded grades

to governors on the basis of their cumulative

But is this good news for taxpayers? It

lowest grades.

record in office--from their inauguration to

depends, of course, on what each governor

the present day. This year, the methodology

and state legislature plan to do with the

has been changed to award grades to gover-

money. Some plan to spend most or all of the

nors on a term-by-term basis. That will assist

windfall, while others are planning to give it

readers in tracking how the quality of a gov-

back to those who produced it: the taxpayers

ernor's fiscal stewardship rises or declines

of their state.

over time.

Such is the context for the Cato Institute's

Only when governors leave office will they

eighth biennial fiscal policy report card on the

receive a cumulative overall grade--an aver-

nation's governors. The study is a comparative

age of all their term grades--to reflect their

analysis of the budget and tax records of 46

performance during their entire governor-

governors. (Three governors--James Risch of

ships. The overall grades for each of the eight

Idaho, Jon Corzine of New Jersey, and Tim

incumbent governors who are leaving office

Kaine of Virginia--were excluded because they

in 2007 are given in Table 2.

assumed office too recently for their records to

Also bear in mind that some governors

be fully assessed. The governor of Alaska was

excluded for technical reasons.)2 The report

graded this year were inaugurated in January

2005 or after. Therefore, they have been award-

card provides an index of fiscal restraint for

ed "midterm" grades. Those governors have

each governor. Governors who cut taxes and

been noted with an asterisk in Table 1.

spending the most receive the highest grades.

This year only one governor receives a

Those who raised taxes and spending the most

grade of A: Matt Blunt of Missouri. Nine gov-

receive the lowest grades.

ernors receive Fs. In alphabetical order, they

The grading mechanism is based on 23

are Kathleen Blanco of Louisiana, Michael

objective measures of fiscal performance. The

Easley of North Carolina, Kenny Guinn of

sources of the tax and spending data in the

Nevada, Christine Gregoire of Washington,

study are the U.S. Bureau of the Census, the

Mike Huckabee of Arkansas, Ruth Ann

National Association of State Budget Officers,

Minner of Delaware, Janet Napolitano of

the National Conference of State Legislatures,

Arizona, Bob Riley of Alabama, and Brian

and the budget offices of each governor and

legislature.3

Schweitzer of Montana.

Appendix A to this report discusses some

caveats to keep in mind while reading this

The High-Scoring

report card. Appendix B provides a detailed

Governors

discussion of the report card's methodology

and the 23 policy variables that it examines.

Appendix C contains the tables that outline

The governor with the best fiscal record is

the grade each governor receives in each

Matt Blunt of Missouri, who is currently in

2