<<  <  >  >>

Pennsylvania

Ed Rendell, Democrat

Legislature: Republican

First-Term Grade: C

a 10 percent income tax increase. Since then,

Ed Rendell started his tenure very poorly. He

Rendell has noticed that the corporate tax rate of

received an F as a midterm grade largely as a

9.99 percent is the second highest in the nation

result of his push for a massive $2.8 billion tax

and is a major deterrent to economic growth. He

hike package that boosted personal income taxes

proposed to cut it to 7.9 percent. Because of

by 35 percent, hiked beer and business taxes, and

changes to the tax base, the plan would be almost

used less than half of the amount raised to

revenue neutral so it wouldn't substantially

reduce local property taxes. Even when the feder-

change the tax burden, but the rate cut is a much-

al government bailed out Pennsylvania with

needed component of any economic develop-

$900 million, Rendell didn't back down from his

ment approach for Pennsylvania. Rendell is also

tax hike. The state legislature fought Rendell's

to be commended for speeding up the phase-

plan in a bruising year-long fight during which

down of the capital stock and franchise tax--

even many Democrats in the Pennsylvania

another onerous business tax. It's quite a change

House refused to vote for his tax plan. Ultimately,

from his first two years.

they accepted a $700 million tax hike, including

Rhode Island

Donald Carcieri, Republican

Legislature: Democratic

First-Term Grade: C

ing and signing into law an increase in the cig-

Donald Carcieri's grade has been hurt most-

arette tax from $1.71 to $2.46. In 2006, howev-

ly by a big-spending legislature that has consis-

er, Carcieri finally signed into law a tax reform

tently overridden his budget vetoes. Carcieri

plan that created an optional flat tax with a top

has proposed budgets that have reined in

rate that would be phased down to 5.5 percent

spending; in fact, if his budgets had been

from 8 percent by 2011. The legislation also

passed as written, the state general fund would

strengthened the state property tax cap and

only be 2.5 percent larger in real per capita

continued the phaseout of the motor vehicle

terms than when he assumed office in 2003.

excise tax. If only the legislature were as eager to

Instead, government has grown by an annual

cut spending as it has been to agree to cut taxes,

average of 3 percent in real per capita terms in

Rhode Island would be better off--and so

just the past two years. Carcieri has done his

would Donald Carcieri's grade.

own bit of damage to his grade, too, by propos-

34