Tax Analysts Blog

Schooling the Governors

Posted on Oct 15, 2014

The Cato Institute has long issued a report card on the nation's governors. The grades are based on what Cato thinks constitutes good fiscal policy. Governors who work for policy like that get A's, and those who don't get F's. Back when my libertarianism was still in the closet, I wrote critically of the Cato report card. I now regret my harsh critiques of the project because I believe Cato does the nation a great service by analyzing, assessing, and rating state executives.

That doesn't mean everyone does or should agree with Cato's assessment of each governor. The report card serves as a marker representing the institute's views, and those views challenge liberal and traditional conservative thinking on fiscal issues. Reading the report card and other works by the institute may change some minds. But more importantly, it broadens the debate over the role of fiscal policy in particular and government more generally. So if you pray at the altar of the Center on Budget and Policy Priorities or of Citizens for Tax Justice, I hope you won't reflexively dismiss the Cato report card. Rather, I hope you'll seriously consider the arguments in it. I also encourage libertarians and conservatives to follow the work of the CBPP, Citizens for Tax Justice, and Good Jobs First closely. Just because their political philosophy is different than yours doesn't make their fiscal arguments wrong.


Now that I have everyone holding hands, let's look at this year's report card. There were only four A students, which tells you that Cato is a tough grader. Indiana's Mike Pence (R), Maine's Paul LePage (R), Kansas's Sam Brownback (R), and North Carolina's Pat McCrory (R) were rated the only excellent governors when it comes to fiscal policy.


I realize that picking those four will jeopardize the possibility of any liberals taking the report card seriously. All four significantly cut taxes and have fought for less government spending, so it's not surprising that Chris Edwards and Nicole Kaeding of Cato put them at the front of the class.


I like most of those choices. I think LePage (who removed 70,000 low-income citizens from the tax rolls), McCrory (who led significant reform), and Pence (who should get an A for fighting to eliminate the personal property tax on business equipment) deserved their grades. However, I disagree with the Brownback grade. While I generally like the idea of income and business tax cuts, I think Brownback deserves a D for supporting a policy that exempts from taxation income from passthrough entities. That's bad tax policy whether you're conservative, liberal, or libertarian. By the way, LePage and Brownback are seeking reelection this year, and right now the polls suggest they won't be coming back to the governor's mansion.


Eight governors failed: Minnesota's Mark Dayton (DFL), Oregon's John Kitzhaber (D), Delaware's Jack Markell (D), Washington's Jay Inslee (D), Illinois's Pat Quinn (D), Massachusetts's Deval Patrick (D), Colorado's John Hickenlooper (D), and California's Jerry Brown (D). That sounds harsh to most Americans. We don't fail. Kids get straight A's, go to Ivy League schools, and eventually work in a profession their parents can brag about. The failing governors are what we used to call tax-and-spend liberals. None have met a tax (or a spending policy) they didn't embrace. So I generally agree with Cato on its assessment of the worst kids in the class. Of those up for reelection, only Quinn is in any danger of not retaining his position.


The one governor who should have gotten an F but inexplicably received a B is Andrew Cuomo. The Democrat from New York pushed the worst tax policy idea of all time: tax-free zones. I'm disappointed Cato didn't call him on it.

This post is an excerpt of an article that first appeared in State Tax Notes.

Read Comments (3)

travis rechOct 15, 2014

Jerry Brown balances his budget, gets a D. Brownback drives his state into
full on emergency budget crisis gets an A.

Sounds about right.

amt buffOct 16, 2014

Jerry Brown's policy changes didn't balance the budget. California's
pre-existing 10% capital gains tax rate coupled with the Fed's asset bubble
blowing Quantitative Easing policy did that.

travis rechOct 16, 2014

@amtbuff You can argue that his policies didn't cause California's fiscal
recovery, fine. But you can't deny that Brownback's policy have nearly
bankrupted Kansas.

It's quite clear their metric has nothing to do with fiscal responsibility or
making good decisions. It's a simple cro-magnon metric "tax cuts always good
spending always bad." Giving an A to a person who has bankrupted his state
fiscally is the sign of an organization that is intellectually bankrupt
themselves.

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