Governors play a key role in state fiscal policy. They propose budgets, recommend tax changes, and sign or veto tax and spending bills. When the economy is growing, governors can use rising revenues to expand programs, or they can return extra revenues to citizens through tax cuts. When the economy is stagnant, governors can raise taxes to close budget gaps, or they can trim spending.

This report grades governors on their fiscal policies from a limited-government perspective. Governors receiving an A are those who have cut taxes and spending the most, whereas governors receiving an F have raised taxes and spending the most.

State government budgets have grown substantially in recent years with the influx of federal aid during the COVID-19 pandemic. That aid has now started to wane, but rising tax revenues have fueled continued budget growth. At the same time, large surpluses in many states have prompted the passage of major tax cuts and reforms.

That is the backdrop to this year’s 17th biennial fiscal report card on the governors, which examines state budget actions since 2022. It uses statistical data to grade the governors on their tax and spending records: Governors who restrained taxes and spending receive higher grades, while governors who substantially increased taxes and spending receive lower grades.

Six governors receive a grade of A: Kim Reynolds of Iowa, Jim Pillen of Nebraska, Jim Justice of West Virginia, Sarah Huckabee Sanders of Arkansas, Kristi Noem of South Dakota, and Greg Gianforte of Montana. Six governors receive an F: Tony Evers of Wisconsin, John Carney of Delaware, Jay Inslee of Washington, Janet Mills of Maine, Kathy Hochul of New York, and Tim Walz of Minnesota.

This report examines the tax and spending choices made by the nation’s governors and discusses recent policy trends. To spur growth, half the states have cut their individual or corporate income tax rates in recent years, and some states have converted their multirate individual income taxes into single-rate flat taxes. Unfortunately, many states have also been larding their tax codes with special interest breaks for filmmaking, green energy, and other politically favored industries.

Another trend affecting state budgets is the expansion of school choice programs. More than 30 states now provide support for private schooling through various tax and spending mechanisms. A dozen states have made eligibility for their school choice programs universal or near universal for all students.

Read the Fiscal Policy Report Card on America’s Governors 2024

The nation’s economy was damaged by the pandemic in 2020, but it bounced back strongly and grew until the end of 2021. The rebound generated a large tax revenue increase for state governments, which also received a flood of pandemic aid from the federal government. The states used soaring revenues to expand their budgets and provide individuals and businesses with temporary or permanent tax cuts.

That is the backdrop to this year’s 16th biennial fiscal report card on the governors, which examines state budget actions since 2020. It uses statistical data to grade the governors on their tax and spending records: governors who restrained taxes and spending receive higher grades; those who substantially increased taxes and spending receive lower grades.

Five governors receive a grade of A: Kim Reynolds of Iowa, Chris Sununu of New Hampshire, Pete Ricketts of Nebraska, Brad Little of Idaho, and Doug Ducey of Arizona. Eight governors receive an F: Tim Walz of Minnesota, Tom Wolf of Pennsylvania, J. B. Pritzker of Illinois, Gretchen Whitmer of Michigan, Phil Murphy of New Jersey, Kate Brown of Oregon, Gavin Newsom of California, and Jay Inslee of Washington.

The report examines the tax and spending choices made by the governors and discusses recent policy trends. Twenty‐​one states have cut individual or corporate income tax rates since 2020, and about 20 states have provided one‐​time tax rebates. Meanwhile, many states have expanded tax revenues from marijuana, gaming, and online sales. Another important trend is the interstate migration of residents from high‐​tax states to low‐​tax states.

Current state budget surpluses may diminish if the U.S. economy continues to stagnate. Fortunately, most states have built large rainy day funds, which they can tap if tax revenues fall in the months ahead. Governors should focus on pruning low‐​value programs from budgets and pursuing growth‐​enhancing reforms such as income tax rate cuts.

Read the Fiscal Policy Report Card on America’s Governors 2022

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.

Read the Fiscal Policy Report Card on America’s Governors 2020

The U.S. economy is in its 10th year of economic expansion, and state government budgets are benefiting from a solid growth in tax revenues. State general fund revenues have grown 40 percent since 2010. Many of the nation’s governors have used the growing revenues to expand spending programs, whereas others have pursued reductions in taxes.

That is the backdrop to this year’s 14th biennial fiscal report card on the governors, which examines state budget actions since 2016. It uses statistical data to grade the governors on their taxing and spending records — governors who have cut taxes and spending the most receive the highest grades, whereas those who have increased taxes and spending the most receive the lowest grades.

Five governors were awarded an A on this report: Susana Martinez of New Mexico, Henry McMaster of South Carolina, Doug Burgum of North Dakota, Paul LePage of Maine, and Greg Abbott of Texas. Eight governors were awarded an F: Roy Cooper of North Carolina, John Bel Edwards of Louisiana, Tom Wolf of Pennsylvania, Jim Justice of West Virginia, Dennis Daugaard of South Dakota, David Ige of Hawaii, Kate Brown of Oregon, and Jay Inslee of Washington.

Governors of every state are having their fiscal choices shaped by the federal Tax Cuts and Jobs Act of 2017. State income tax bases are tied to the federal tax base, so governors have been considering which federal changes to conform to. Also, the capping of the federal tax deduction for state and local taxes has increased the bite of those taxes for millions of households. The cap has increased the relative burden of living in a high-tax state, and it may induce higher out-migration from those states over time.

The state fiscal environment is also being shaped by recent Supreme Court decisions regarding online sales taxes and public-sector labor unions. Furthermore, the legalization of marijuana has created a new source of revenue for some states.

This report discusses these fiscal policy developments and examines the tax and spending actions of each governor in detail. The hope is that the report encourages more state policymakers to adopt the fiscal approaches of the top-scoring governors.

Download “Fiscal Policy Report Card on America’s Governors 2018”

State governments have been in an expansionary phase in recent years. Even though U.S. economic growth since the last recession has been sluggish, general fund revenues of state governments have grown 33 percent since 2010. Some of the nation’s governors have used the growing revenues to expand spending programs, while others have pursued tax cuts and tax reforms.

That is the backdrop to this year’s 13th biennial fiscal report card on the governors, which examines state budget actions since 2014. It uses statistical data to grade the governors on their taxing and spending records — governors who have cut taxes and spending the most receive the highest grades, while those who have increased taxes and spending the most receive the lowest grades.

Five governors were awarded an “A” on this report: Paul LePage of Maine, Pat McCrory of North Carolina, Rick Scott of Florida, Doug Ducey of Arizona, and Mike Pence of Indiana. Ten governors were awarded an “F”: Robert Bentley of Alabama, Peter Shumlin of Vermont, Jerry Brown of California, David Ige of Hawaii, Dan Malloy of Connecticut, Dennis Daugaard of South Dakota, Brian Sandoval of Nevada, Kate Brown of Oregon, Jay Inslee of Washington, and Tom Wolf of Pennsylvania.

With the growing revenues of recent years, most states have balanced their short-term budgets without major problems, but many states face large challenges ahead. Medicaid costs are rising, and federal aid for this huge health program will likely be reduced in coming years. At the same time, many states have high levels of unfunded liabilities in their pension and retiree health plans. Those factors will create pressure for states to raise taxes. Yet global economic competition demands that states improve their investment climates by cutting tax rates, particularly on businesses, entrepreneurs, and skilled workers.

This report discusses fiscal policy trends and examines the tax and spending actions of each governor in detail. The hope is that the report encourages more state policymakers to follow the fiscal approaches of the top-scoring governors.

Download “Fiscal Policy Report Card on America’s Governors 2016”