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GOP governors ace fiscal exam; report praises executives elected in tea party wave

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Republican governors elected in 2010's tea party wave have generally made good on pledges to cut taxes and limit spending, according to the latest fiscal report card released Tuesday by the Cato Institute think tank, which graded the states' executives on their boldness is reining in government expansion.

On average, Republican chief executives were more fiscally conservative than Democrats, and the 17 newly elected GOP governors led the way, with all four governors who earned "A" grades from Cato having won their seats in the tea party-powered 2010 wave election.

"The crop of new Republican governors in 2010 made a substantial difference," said Chris Edwards, the report author and director of tax policy studies at Cato. "There's a dozen of them at least who are very much determined to make tax reforms."

The four governors who earned "A" grades were Sam Brownback of Kansas, Rick Scott of Florida, Paul LePage of Maine and Tom Corbett of Pennsylvania.

Meanwhile, the five governors who earned failing grades were all Democrats. New Hampshire Gov. John Lynch was the top-scoring Democrat with a B.

Cato releases the report every other year and looks at what tax reforms governors tried to shepherd through their legislatures, and whether they were able to limit or even reduce spending during their time in office.

Some Republicans with reputations for fiscal conservatism ended up only in the middle of the pack with just "C" grades, including Texas Gov. Rick Perry and Virginia Gov. Bob McDonnell.

Mr. Edwards said Mr. Perry suffered both because Texas's governorship isn't a powerful position, and because the influx of action-oriented governors in 2010 has pushed him down the list, which Mr. Edwards said is graded on a curve.

As for Mr. McDonnell, though, Mr. Edwards said he's been a bit of a disappointment.

"I live in Virginia so I followed his career to an extent. He's kind of been a do-nothing governor, it seems to me, on these tax-and-spending issues," Mr. Edwards said. "McDonnell's rhetoric seems to be quite a bit different than his reality."

Jeff Caldwell, a spokesman for the governor, said Mr. McDonnell should be judged by his progress since he won election in 2009, which Mr. Caldwell said includes doubling the state's rainy-day fund, closing an initial $6 billion budget shortfall and pushing for money to begin fixing the underfunded state pension system.

"He immediately rejected a proposed $2 billion tax hike left by the previous administration, and instead closed that shortfall by reducing state spending to 2007 levels and making state government more efficient and effective," the spokesman said. "In his three years in office he has overseen three consecutive budget surpluses totaling $1.4 billion, all without raising taxes."

Also scoring a "C" was New Mexico Gov. Susana Martinez, one of the stars of the Republican nominating convention in August. The report put her "below average," but Mr. Edwards he expects her to improve ahead of the next set of grades.

"I think she is very fiscally conservative but she's got quite a left-wing legislature," he said. "Budget wonks in New Mexico tell me she's very good and she's hoping for a more conservative legislature after this fall's elections."

Mr. Edwards said one growing problem on both sides of the aisle is governors' willingness to pass special tax exemptions to attract or keep favored industries and companies.

That was one reason he gave an "F" grade and a score of 16 out of 100 to Illinois Gov. Pat Quinn, who after raising taxes overall, "dished out a series of special breaks to particular companies that threaten to leave."

"The spread of state tax incentives represents a troubling move away from free markets and toward crony capitalism," the Cato report concluded.

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