Fiscal Policy Report Card on America’s Governors 2020

[Muda69]

https://www.cato.org/publications/white-paper/fiscal-policy-report-card-americas-governors-2020

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Going into 2020, the United States was in its 11th year of economic expansion and state governments were enjoying robust revenue and spending growth. Then COVID-19 hit and triggered a deep recession. State governments have seen their projected revenues decline and have started trimming spending to keep their 2021 budgets balanced. Some states had accumulated large rainy day funds and were prepared for the downturn, but other states have been overspending, accumulating debt, and saving little for the rainy day that has now arrived.  

That is the backdrop to this year’s 15th biennial fiscal report card on the governors, which examines state budget actions since 2018. It uses statistical data to grade the governors on their tax and spending records—governors who have restrained taxes and spending receive higher grades, while those who have substantially increased taxes and spending receive lower grades.

Four governors were awarded an A on this report: Chris Sununu of New Hampshire, Kim Reynolds of Iowa, Pete Ricketts of Nebraska, and Mark Gordon of Wyoming. Seven governors were awarded an F: Ralph Northam of Virginia, Andrew Cuomo of New York, Gretchen Whitmer of Michigan, Phil Murphy of New Jersey, J. B. Pritzker of Illinois, Kate Brown of Oregon, and Jay Inslee of Washington.

This report examines the widely varying tax and spending choices that governors have made in recent years. It discusses ways that states can respond to today’s budget challenges, including tapping revenues from marijuana legalization and cutting costs by prohibiting public‐sector collective bargaining. The report also describes how states can prepare for future downturns by building large rainy day funds and creating stable and pro‐growth tax bases.

With the 2020 health crisis and recession, governors across the nation are facing tough fiscal choices. However, the need for restraint and recovery provides an opportunity for governors to prune low‐value spending from state budgets and to pursue growth‐enhancing tax reforms.

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Indiana

Eric Holcomb, Republican

Legislature: Republican

Grade: B

Took office: January 2017

Eric Holcomb entered office in 2017 after a career in the U.S. Navy and numerous public positions, including being an adviser to former Indiana governor Mitch Daniels.

Holcomb scored poorly on the 2018 Cato fiscal report, mainly because of his support for tax increases. In 2017, he signed a transportation bill that increased the state’s gas tax from 18 cents to 28 cents per gallon and imposed new fees on vehicle owners. Since then, Holcomb has approved further modest tax increases, including expanding taxes on online sales.

However, Holcomb scored well on spending. He has proposed lean budgets, and general fund spending rose an average of just 3.4 percent annually the past two years.

Yes, the government-imposed costs of owning and driving a motor vehicle in this state is insane. Has to be a big profit center for the state's coffers.

 

Edited October 6, 2020 by Muda69