Saturday, October 2, 2010

Fiscal report card on the governors

From Chris Edwards of the Cato Institute on Sept. 30:

We released Cato's report card on the fiscal policies of the governors today. We calculated data on the taxing and spending habits of 45 of the nation’s 50 governors, between 2008 to August 2010.

The governors are scored from 0 to 100 on seven separate taxing and spending variables. The scores are aggregated and converted to letter grades, A to F.

Four governors earned an “A” this year: Tim Pawlenty of Minnesota, Bobby Jindal of Louisiana, Mark Sanford of South Carolina, and Joe Manchin of West Virginia. You can read the report to find out what these governors did right from our limited-government point of view.

As it turns out, the residents of these four states seem to like the fiscal stance of their winning governors, who favor tax cuts and spending restraint.

Pawlenty has a 52 percent approval rating in quite a liberal state.

Jindal has a 74 percent approval rating.

Manchin has a 69 percent approval rating.

Sanford has a 55 percent approval rating, despite the troubles in his personal life.

Governors shouldn’t just focus on being popular in a superficial sense. These polls tell us that governors who focus on cutting taxes and spending in an honest and intelligent way will be supported by the people.

Charlie Crist, I-Fla., received a 49 percent approval rating, earning him a grade of a D, "mainly because of a large tax increase he supported in 2009," the report says. Cato rated him an A in 2008 mostly because he supported large property tax cuts. Here's Cato's summary of Crist:

In the 2008 Cato report card, Governor Crist received an “A” based on his support of property tax cuts and spending restraint. But since then, the governor has switched fiscal gears and supported large tax increases on Floridians. Crist signed into law a $2.2 billion increase in 2009, which included a $1 per pack increase on cigarette consumers and more than $1 billion in new “fees” for vehicle licenses, fishing licenses, and other items. Then, exhibiting amnesia, Crist declared in his 2010 State of the State address: “My core principle is to not raise taxes.”

Crist continues to support property tax relief, but it is not clear that such relief would lead to lower taxes overall. A proposed “tax swap” in 2008 would have reduced local property taxes but increased state-level taxes by perhaps a greater amount. This report does not consider Governor Crist’s troubling fiscal actions with regard to the state’s property insurance system. The actions of the governor have helped create a system that keeps insurance rates far below the market level, causing an exodus of private insurers, and leaving a government agency—the Florida Citizens Property Insurance Corporation—as the largest homeowners’ insurer in the state. Crist has also helped expand a massively underfunded government hurricane reinsurance fund, the Florida Hurricane Catastrophe Fund.

Following a major hurricane or series of hurricanes, claims to the fund could be tens of billions of dollars more than available assets, and taxpayers would probably have to foot a huge bailout bill. Crist has repeatedly opposed bills that would improve the actuarial soundness of the state’s insurance system.


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