How does Maryland Gov. Parris Glendening's fiscal record stack up against those of other governors? Not very well. In our just-completed "Fiscal Policy Report Card on America's Governors," Glendening was one of nineteen governors to receive a grade of "C."
That study, our fourth biennial report card, presents an objective, comparative analysis of the spending and tax policies of America's governors from the taxpayers' perspective. Governors who have cut spending and taxes the most get the highest grades; governors who have raised spending and taxes the most get the lowest grades.
Parris Glendening won the governor's office in 1994, beating tax-cutter Ellen Sauerbrey by a whisker in an election marred by charges of widespread vote fraud in Baltimore. The Glendening paradox is that despite governing during times of high incumbent popularity, he has never won the hearts of Marylanders. His poll ratings have consistently sagged below 40 percent, and some pollsters have panned Glendening as the least popular governor in America.
That is partly a reflection of the technocratic Glendening's utter lack of personal charm, partly due to a seemingly aimless policy agenda, and partly a result of a state economy that has consistently underperformed the rest of the nation in the 1990s. From 1990 to 1997 Maryland ranked 46th in per capita income growth and 38th in job growth.
To his credit, last year Glendening proposed a 10 percent income tax rate cut to be phased in over five years, arguing correctly that "a tax cut is the single most effective policy to bring jobs back to Maryland." The plan passed, but no one was particularly pleased. Republicans still want a 25 percent tax cut, and many liberal Democrats, who have a decades-long stranglehold on the state legislature, wanted to spend the money instead.
Glendening's expansionary fiscal record is in keeping with the recent national trend. While on our 1996 report card we noted that the governors had moved states in a pronounced fiscally conservative direction, now we are much less optimistic.
The truth is that, even with the modest tax cut, the budget has expanded greatly during Glendening's term. His budgets have generally requested that expenditures grow at nearly twice the inflation rate. The Washington Post recently reported that Glendening has "showered money on local schools, higher education, health care coverage for the poor, and environmental programs to protect the Chesapeake Bay."
Glendening is mostly a pro-government interventionist, as evidenced by his legislation to restrict gun ownership, raise the cigarette tax, impose workplace smoking bans, and fund a $200 million football stadium in Baltimore. It is no wonder that he will face another tough challenge from Ellen Sauerbrey in November.
Glendening's expansionary fiscal record is in keeping with the recent national trend. While on our 1996 report card we noted that the governors had moved states in a pronounced fiscally conservative direction, now we are much less optimistic. Over the last two years, as the national economic expansion has filled state coffers with revenues, there has been a clear trend toward more spending at the state level. In 1997 the states ended the fiscal year with about $21 billion more in tax collections than they had anticipated. This year, for the sixth year in a row, the states are once again seeing sizable revenue windfalls.
Those surpluses have provided an irresistible temptation to spend. In an era of almost no inflation, state budgets grew by 5 percent in FY97 and more than 6 percent in FY98. This year, many governors recommended budget increases of more than 7 percent, roughly three times the rate of inflation.
Indeed, many GOP governors have proposed the same types of spending initiatives that populate Bill Clinton's budget requests, such as expanded government programs for child care, health care, education and the environment. Wisconsin Gov. Tommy Thompson himself recently declared all too truthfully that "you see a new breed of activism among us [Republican governors]." Ohio Gov. George Voinovich adds that "we recognize there are problems to be solved and that there is a role for government to play."
The states' recent budget expansion is reminiscent of their behavior in the prosperous years of the 1980s. Then, as now, states used revenue windfalls to embark on a fiscally reckless spending spree, expanding existing programs and creating many new ones. When the U.S. economy slowed in the early 1990s, that spending spree served only to exacerbate the fiscal crises in the states. The states do not seem to have learned their lesson.
Annapolis is no exception to this nationwide trend toward higher spending. Maryland has been moving in the wrong direction under Gov. Glendening. The revenue windfall from our strong economy should be returned to taxpayers, not carelessly spent by governors and state legislators as if it were manna from heaven.