CATO Institute Releases Biennial Fiscal Policy Report Card on America’s Governors

October 6, 2020 by Sara Wilkerson
Iowa Gov. Kim Reynolds at the National Governors Association Winter Meeting in Washington. (Photo by Dan McCue)

Today the CATO Institute, a non-profit public policy research foundation, released its 15th biennial fiscal policy report card on the nation’s governors. This year’s CATO report card examines the country’s governors and their state budget actions since 2018. 

Prior to the COVID-19 pandemic, the nation was reaching its 11th year of economic expansion since the 2008 Great Recession. However, CATO notes that since the start of the pandemic, state governments experienced variable reactions as to how they handled the resulting COVID-19 recession. 

According to the report’s executive summary, “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.” 

The CATO Institute based its grading on the governors’ tax and spending records that were obtained from various sources such as the National Association of State Budget Officers, the National Conference of State Legislatures, the Tax Foundation, the budget agencies of each state, and news articles from the media. 

To score a high letter grade from CATO, data from the state governors’ records needed to have indicated that they cut taxes and reduced state government spending, whereas those scoring lower grades ended up raising taxes and increased state spending. 

It is worthwhile to point out that not all of the country’s governors were evaluated in CATO’s fiscal report card. 

“The report rates 47 governors. It excludes the governors of Kentucky and Mississippi because they have been in office only a brief time, and it excludes the governor of Alaska because of peculiarities in that state’s budget,” stated the CATO report. 

In terms of those who fared the best of those evaluated, four governors were awarded A’s from CATO: Chris Sununu, R-N.H., Kim Reynolds, R-Iowa, Pete Ricketts, R-Neb., and Mark Gordon, R-Wyo. 

Meanwhile, there were seven governors who received a F grade for their fiscal policy management: Ralph Northam, D-Va., Andrew Cuomo, D-N.Y., Gretchen Whitmer, D-Mich., Phil Murphy, D-N.J., J. B. Pritzker, D-Ill., Kate Brown, D-Ore., and Jay Inslee, D-Wash. 

In discussing the partisan division in the awarded letter grades, the institute stated that for this year’s report card, “Republicans received higher scores than Democrats, on average, on both spending and taxes, although the Republican advantage on taxes was greater than on spending, which was also the case in prior reports.” 

When it comes to the economy, CATO explained that there are noticeable partisan differences in how governors govern their state. 

“When the economy is growing and state coffers are filling up, Democrats tend to increase spending, while Republicans tend to both increase spending and cut taxes. During economic downturns, Democratic governors often pursue tax increases to balance their budgets, while Republicans put greater focus on spending restraint,” according to the report. 

In conjunction with the release of the report card, CATO hosted a live discussion between Peter Goettler, the president and CEO of CATO, Chris Edwards, CATO’s Director of Tax Policy Studies, and New Hampshire Governor Chris Sununu, who received the highest fiscal grade (75) out of those evaluated by CATO. 

In their discussion, Goettler and Edwards highlighted the report’s findings and Gov. Sununu’s leadership and fiscal policies in the state of New Hampshire. 

“Other states should look to the New Hampshire model and Gov. Sununu’s outstanding example of fiscal leadership,” said Goettler at the beginning of the discussion. 

In reflecting on his government’s fiscal success, Sununu said that his government focused on deregulatory measures such as tax cuts to help benefit those in his state. 

“The best thing that government can do is to get out of people’s way… Putting individuals and businesses first [is] one of the philosophies we [in New Hampshire] try to bring to the table,” said Sununu. 

Sununu further reflected on his state’s success by commenting on the A grade he received from the CATO Institute. 

“Getting an A from CATO is huge. And I’m not going to lie to you, the first person I’m going to call is my father to show him I can get A’s. They were a little hard to come by at MIT back in the day,” the governor joked. 

Sununu added, “It’s an incredible honor [coming from] such a reputable, world-renown organization to be recognized for the fruits of your labor.” 

Further on in the discussion, Sununu and Edwards discussed New Hampshire’s recovery amid the COVID-19 Pandemic. 

Edwards pointed out that New Hampshire has brought its unemployment rate of 17% spike since the pandemic started down to 4.5%. Sununu attributes his state’s success at lowering their unemployment rate to the state’s priority of putting businesses first by allowing “stakeholder input” in the state’s business reopenings. 

“It’s just about putting others first as opposed to big government,” Sununu said.

The CATO Institute’s report provides an in-depth analysis of not just the performance of the country’s governors, but the report also gives insight into recent fiscal policy developments and trends of the nation. To read more about the report, view the CATO Institute’s full report online

In The News

Health

Voting

Think Tanks

‘There’s just something about Putinism,’ Analysts Reflect on Russia and US Foreign Policy
Think Tanks
‘There’s just something about Putinism,’ Analysts Reflect on Russia and US Foreign Policy
June 17, 2021
by Kate Michael

WASHINGTON — The recent summit between U.S. President Biden and Russian President Putin has been hailed by both countries as an opportunity to reevaluate the nations' relationship. While the three-hour conversation may not have inspired confidence toward ensuring stability, the meeting did reflect Russia’s ongoing importance... Read More

Democrats Hopes in 2022 Hinge on Voters of Color, Analysis Finds
Think Tanks
Democrats Hopes in 2022 Hinge on Voters of Color, Analysis Finds
June 14, 2021
by Reece Nations

An analysis of the 2020 election conducted by several prominent Democratic advocacy groups determined that voters of color played critical roles in key races, among other findings. The report — conducted jointly by The Collective PAC, The Third Way and Latino Victory — concluded that drop-offs... Read More

Kakto Presses Administration to Take Cybersecurity More Seriously
Think Tanks
Kakto Presses Administration to Take Cybersecurity More Seriously
June 11, 2021
by Victoria Turner

Rep. John Katko, R-N.Y. recently went into a couple of Lincoln car dealerships in Syracuse, New York, but “neither one of them had any cars.”  “And they’re not going to have any cars for several weeks because of the chip shortage,” Katko said during a "fireside... Read More

Former Patent Office Director Says American Ingenuity Answer to China IP Theft
Think Tanks
Former Patent Office Director Says American Ingenuity Answer to China IP Theft
May 28, 2021
by Kate Michael

WASHINGTON — From counterfeiting to talent acquisitions and even forced technology transfers, the United States has long struggled with the idea that China is facilitating or condoning the theft of American intellectual property. In fact, China is often cited as the world’s principal IP infringer. But... Read More

All Day Summit to Spotlight Rising Democrats
Political News
All Day Summit to Spotlight Rising Democrats
May 24, 2021
by TWN Staff

WASHINGTON - The 2021 NewDEAL Ideas Summit, which kicks off Wednesday at 11:30 a.m., will feature an interview with Sen. Chris Coons, D-Del., along with discussions among some of the most innovative state and local elected Democrats from across the country. Speakers during the virtual day-long... Read More

Is Income-Driven Repayment Contributing to Federal Student Loan Payment Problems?
Think Tanks
Is Income-Driven Repayment Contributing to Federal Student Loan Payment Problems?
May 14, 2021
by Kate Michael

WASHINGTON — Student loan forgiveness has been a topic of conversation as the Biden administration continues to consider proposals for alleviating student loan debt, but in the absence of any news on that front, borrowers are starting to get worried as federal student loan repayment is... Read More

News From The Well
scroll top