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Minnesota

Tim Pawlenty, Republican

Legislature: Divided

First-Term Grade: C

casino license fee. He stared down the legisla-

When he ran for governor in 2002, Tim

ture, which wanted to spend even more

Pawlenty was the only candidate to pledge

money, leading to a temporary shutdown of

not to raise taxes. Upon taking office, he

the state government. In the end, he agreed to

tended to rely on expanding revenue through

a cigarette tax increase. Pawlenty has been

fee increases, instead, which, in this report

good at keeping most general tax increases at

card, amounts to another form of taxes. Early

bay, but it looks like he's beginning to fall

on, Pawlenty stuck to his guns on spending.

prey to the temptation to spend more now

In his first two years, he cut more than $2 bil-

that the state has come upon better fiscal

lion in spending and held the growth of the

times. If he wins another term, he needs to

budget to the lowest rate in 40 years. By 2005,

stop just fighting tax increases and instead

however, Pawlenty started looking like a big

propose some actual tax cuts to improve his

spender. His budget that year boosted spend-

grade.

ing by close to 6 percent mainly fueled by a

Mississippi

Haley Barbour, Republican

Legislature: Democratic

Midterm Grade: C

Barbour vetoed a cigarette tax increase. Yet he

When former Republican Party chairman

also vetoed a grocery tax cut, too, on the

Haley Barbour won the governorship in

grounds that the state needed the money.

2004, he vowed to cut spending, veto tax

With budget growth rates like the ones

increases, and focus on creating an economic

Mississippi has seen, it's clear that the fiscal

environment conducive to job creation. His

problems in the state are caused by too much

first budget included substantial spending

spending, not too little revenue. Barbour

cuts, which amounted to more than 5 per-

needs to do more to convince the legislature

cent in real per capita terms in 2005. But the

to get the budget under control. In a state

Democratic legislature has been more than

that has a worse business tax climate than

happy to spend far more (and Barbour has

Alabama and Tennessee, Barbour needs to

been willing to accept those increases), lead-

propose tax cuts, not simply fight tax hikes. It

ing to a hike in spending by an average of 5

would be a better strategy for spurring job

percent in real per capita terms over the past

creation than his current approach.

two years. After Hurricane Katrina hit,

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