Conservative ‘think tank’ gives Almond a ‘C’ grade

The Cato Institute, a Washington, D.C.-based conservative think tank, has released its “Fiscal Policy Report Card on America’s Governors: 1998.”

And Rhode Island’s Gov. Lincoln Almond gets a “C.”

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The Cato Institute report describes Almond’s first term as a “rancorous” one. The report concludes that Almond has improved the economic climate in Rhode Island, “but it remains a terribly inhospitable state for business and workers.”

While Cato researchers were tough on the governor, their report points out that Almond is being asked to perform in a difficult economic climate. Rhode Island, according to the report, has a deep-rooted history of fiscal ills. In part, the report reads; “The years and layers of anti-business policies have had the expected result: virtually every independent financial and business climate index ranks Rhode Island in the bottom five states. Rhode Island is one of only three states — North Dakota and West Virginia are the others — to actually lose population over the past 10 years.”

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The report also points to the banking crisis as having a significant and sobering impact on the Ocean State’s economy. And it does credit Almond for his efforts to cut taxes. It reads, “Almond’s most noteworthy accomplishment has been to enact a series of tax reductions In his first budget Almond approved a tax cut on financial services, thus luring Fidelity and 1,200 new jobs into the state from Massachusetts. Last year he signed into law a 10 percent income tax rate cut and a research and development tax credit. In 1998 he managed to get the legislature to enact a phase out of the car tax and the business inventory tax. He also pushed property tax relief, but the state Senate killed the plan.”

According to Stephen Moore, director of fiscal policy studies, and Dean Stansel, fiscal policy analyst at the Cato Institute, the grading mechanism for the report is based on “purely objective measures” of each governor’s fiscal performance. In a summary attached to the report, Moore and Stansel wrote; “There has been a clear trend toward more spending at the state level during the past two years. This year many governors recommended budget increases of more than 7 percent, roughly three times the rate of inflation. Since 1996 state spending has grown roughly 50 percent faster than federal expenditures. Inflated budgets are now being promoted even by Republican governors who came into office in 1994 and 1995 promoting tax-cutting agendas. In our 1996 report we noted that the governors had moved states in a pronounced fiscally conservative direction. Now we are much less sanguine.”

Only two of the nation’s governors received an “A.” John Rowland of Connecticut and William Janklow of South Dakota, both Republican. Three governors may be looking to hide their Cato report cards. John Kitzhaber of Oregon, Lawton Chiles of Florida and Mel Carnahan of Missouri all Democrats got an “F.”

With the exception of Rowland, Almond’s “C” places him on common ground with his New England colleagues. Angus King, Maine’s Independent governor also received a “C,” as did Howard Dean, Vermont’s Democratic governor and Jeanne Shaheen, the Democrat from New Hampshire. Massachusetts Acting Gov. Paul Cellucci,R was not graded because he has not been in office long enough.

The Republican Rowland drew high praise from the Cato researchers, who wrote of him; “Rowland has been one of America’s most tight-fisted governors over the past four years. He has enacted tough welfare-to-work requirements, frozen the state’s government workforce, held overall expenditure growth to below the inflation rate, and converted the $500 million budget deficit he inherited into a nearly $1 billion four-year surplus. This year he called for giving back $125 million of that surplus to taxpayers in the form of a one-time rebate.”

Among the key findings of the Cato “Fiscal Policy Report Card:”
Governors elected in recent years “have tended to be more aggressive in cutting taxes than those first elected before 1993.”
Northeastern states in particular have moved in the most fiscally conservative direction in the last four years — reversing the high tax and spend policies of previous governors there.
For the first time in four editions of this report card, “party affiliation did seem to make a major difference in the governor’s records of fiscal restraint. Republicans substantially outperformed Democrats.”

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