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New Hampshire

John Lynch, Democrat

Legislature: Republican

First-Term Grade: B

for the state legislature to pass the cigarette tax

Former CEO of Knoll, Inc., a high-end fur-

hike but not the property tax elimination,

niture maker, and current New Hampshire

although the property tax was cut a bit. The

chief executive John Lynch is the best new

cigarette tax increase is the main blemish on

Democratic governor in this report card. The

his record--an unnecessary one, in fact. With

budgets he proposed and signed into law have

the state racking up a budget surplus this year,

been very disciplined. He ran on a platform of

the government clearly isn't lacking money.

opposition to a state income or sales tax and

Lynch has suggested the surplus should go to

has stuck to that promise. He's fought to

a rainy day fund and more government spend-

make good on another campaign pledge, too--

ing on heating assistance and a R&D tax cred-

elimination of the statewide property tax

it. He really should be talking more about

imposed under the last Democratic governor,

broad-based tax cuts instead. Still, Lynch's

Jeanne Shaheen. Lynch's plan was revenue

first term has been mostly friendly to state tax-

neutral and used a cigarette tax increase to

payers.

make up the difference. That opened the door

New Mexico

Bill Richardson, Democrat

Legislature: Democratic

First-Term Grade: C

despite Richardson's reputation as a conserva-

Bill Richardson's midterm grade of a B--

tive Democrat, he's been happy to increase

due in large part to his income tax cutting--

government spending. His budget proposals

has slipped to a final grade of a C for his entire

have grown faster each year, and the general

first term. His income tax cuts were indeed

fund budgets he signed into law between fiscal

substantial. The top marginal income tax rate

2004 and 2006 have grown in total by a whop-

has dropped a remarkable 35 percent as a

ping 23 percent--almost five percentage

result of Richardson's actions and is still the

points faster than population and inflation.

largest income tax rate cut in the nation over

Richardson simply can't maintain a high

the past few years. But the more complete pic-

grade on this report card on the strength of his

ture that has emerged since 2002 is of a gover-

income tax cuts alone. He needs to stop spend-

nor who is eager to raise other taxes, such as

ing so much if he hopes to keep up the appear-

the cigarette tax and gross receipts tax, and

ance of being a "new Democrat."

various fees, too. It's also become obvious that,

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