The ExGovernor Candidates

The Cato Institute was founded in 1977 and is a non-profit public policy research foundation headquartered in Washington, D.C. Below is an excerpt from their 2006 Fiscal Policy Report Card on America’s Governors highlighting the three governors running for the presidency:

Mike Huckabee, Republican
Governor of Arkansas

Final-Term Grade: F
Final Overall Grade: D

Thanks to a final term grade of F, Huckabee earns an overall grade of D for his entire governorship. Like many Republicans, his grades dropped the longer he stayed in office. In his first few years, he fought hard for a sweeping $70 million tax cut package that was the first broad-based tax cut in the state in more than 20 years. He even signed a bill to cut the state’s 6 percent capital gains tax—a significant progrowth accomplishment. But nine days after being reelected in 2002, he proposed a sales tax increase to cover a budget deficit caused partly by large spending increases that he proposed and approved, including an expansion in Medicare eligibility that Huckabee made a centerpiece of his 1997 agenda. He agreed to a 3
percent income tax “surcharge” and a 25-cent cigarette tax increase. In response to a court order to increase spending on education, Huckabee proposed another sales tax increase. Huckabee wants to run for the GOP presidential nomination next year. He’s already been hailed as a viable big-government conservative candidate by some. That seems about right: Huckabee’s leadership has left taxpayers in Arkansas much worse off.

Bill Richardson, Democratic
Governor of New Mexico

First-Term Grade: C

Bill Richardson’s midterm grade of a B due in large part to his income tax cutting has slipped to a final grade of a C for his entire first term. His income tax cuts were indeed substantial. The top marginal income tax rate has dropped a remarkable 35 percent as a result of Richardson’s actions and is still the largest income tax rate cut in the nation over the past few years. But the more complete picture that has emerged since 2002 is of a governor who is eager to raise other taxes, such as the cigarette tax and gross receipts tax, and various fees, too. It’s also become obvious that, despite Richardson’s reputation as a conservative Democrat, he’s been happy to increase government spending. His budget proposals have grown faster each year, and the general fund budgets he signed into law between fiscal 2004 and 2006 have grown in total by a whopping 23 percent—almost five percentage points faster than population and inflation. Richardson simply can’t maintain a high grade on this report card on the strength of his income tax cuts alone. He needs to stop spending so much if he hopes to keep up the appearance of being a “new Democrat.

Mitt Romney, Republican
Governor of Massachusetts

Final Overall Grade: C

As Mitt Romney launches his bid for the Republican presidential nomination, his fiscal record as governor should be scrutinized. Romney likes to advance the image of himself as a governor who has fought a liberal Democratic legislature on various fronts. That’s mostly true on spending: he proposed modest increases to the budget and line-item vetoed millions of dollars each year only to have most of those vetoes overridden. But Romney will likely also be eager to push the message that he was a governor who stood by a no-new-taxes pledge. That’s mostly a myth. His first budget included no general tax increases but did include a $500 million increase in various fees. He later proposed $140 in business tax hikes through the closing of “loopholes” in the tax code. He announced in May 2004 that he wanted to cut the top income tax rate from 5.3 to 5 percent, but that was hardly an audacious stand. Voters had already passed a plan to do just that before Romney even took office. In his budget for 2006, he proposed $170 million more in business tax hikes, almost completely neutralizing the proposed income tax cut. If you consider the massive costs to taxpayers that his universal health care plan will inflict once he’s left office, Romney’s tenure is clearly not a triumph of small-government activism.

You can read the entire report here.