The sharp increase in oil prices in 2007 started the worldwide recession, which brought on our mortgage and loan crisis. The heavily funded state and local governments had spent years meddling with land use and building restrictions which had driven up the cost of housing beyond belief. In the extreme case of California, this caused 80% of new home buyers to become sub-prime borrowers! Such pressures on home buyers helped to fuel support for Fanny Mae, Freddy Mac, the Federal Reserve, and private lending institutions to make mortgages more readily available. The house of cards developed by the combined effects of huge local, state, and federal spending increases, the oil price shock, and the mortgage and loan crisis created the basis for a severe recession. Of course, Obama's socialist and anti-business response to that crisis greatly extended and delayed the recovery.
Let's return our focus to the orgy of spending by local, state, and federal government since 2000 and concentrate on state and local spending and debt. Between 2000 and 2010, state and local government debt increased by 205%! This debt estimate is based on official, unrealistic projections of state and local pension funds, which estimates them to be underfunded by about $1 trillion. Better estimates see them as underfunded by about $3.2 trillion. We have a tendency to focus more on federal spending and debt, but the problem of local and state spending and debt is also huge. We have a general government spending and debt problem.
The Edwards report on governors scores them on
- The average annual percentage change in per capita general fund spending proposed by the governor
- The average annual percentage change in actual per capita general fund spending
- The average dollar value of proposed, enacted, and vetoed tax changes
- Changes in the top personal income tax rate
- Changes in the top corporate income tax rate
- Changes in the general sales tax
- Changes in the cigarette tax rate
The scores and grades are [State, Governor (Party), Score, Grade]:
South Carolina, Mark Sanford (R), 74, A
Louisiana, Bobby Jindal (R), 71, A
Minnesota, Tim Pawlenty (R), 66, A
West Virginia, Joe Manchin (D), 66, A
Wyoming, Dave Feudenthal (D), 63, B
Rhode Island, Don Carcieri (D), 62, B
Oklahoma, Brad Henry (D), 62, B
Nevada, Jim Gibbons (R), 61, B
Texas, Rick Perry (R), 61, B
Alabama, Bob Riley (R), 61, B
Montana, Brian Schweitzer (D), 61, B
Georgia, Sonny Perdue (R), 60, B
Missouri, Jay Nixon (D), 59, B
Idaho, C. L. "Butch" Otter (R), 58, B
New Mexico, Bill Richardson (D), 57, B
Vermont, Jim Douglas (R), 56, B
Indiana, Mitch Daniels (R), 56, B
Maine, John Baldacci (D), 55, B
Maryland, Martin O'Malley (D), 55, B
Kentucky, Steven Beshear (D), 54, C
Michigan, Jennifer Granholm (D), 53, C
Mississippi, Haley Barbour (R), 53, C
South Dakota, Mike Rounds (R), 53, C
Tennessee, Phil Bredesen (D), 53, C
Nebraska, Dave Heineman (R), 51, C
North Dakota, John Hoeven (R), 51, C
Hawaii, Linda Lingle (R), 51, C
Florida, Charlie Crist (R), 49, D
Ohio, Ted Strickland (D), 49, D
California, Arnold Schwarzenegger (R), 47, D
Delaware, Jack Markell (D), 47, D
Arkansas, Mike Beebe (D), 47, D
Iowa, Chet Culver (D), 47, D
Massachusetts, Deval Patrick (D), 43, D
New Hampshire, John Lynch (D), 41, D
North Carolina, Beverly Perdue (D), 40, D
Arizona, Jan Brewer (R), 40, D
Pennsylvania, Edward Rendell (D), 40, D
Washington, Chris Gregoire (D), 39, F
Wisconsin, Jim Doyle (D), 35, F
Colorado, Bill Ritter (D), 35, F
Illinois, Pat Quinn (D), 30, F
Connecticut, Jodi Rell (R), 28, F
New York, David Paterson (D), 25, F
Oregon, Ted Kulongoski (D), 19, F
The average score of the 45 state governors scored was 50. The governors of Kansas, New Jersey, Virginia, and Utah had not been in office sufficiently long to score them. The governor of Alaska is not scored because its budget is so peculiar that it cannot be compared to that of other states.
The average score of Republicans was 55, while that for Democrats was 47. Yet, Gov. Manchin (D) of West Virginia was tied for the 3rd best score with an A at a score of 66, while Gov. Jodi Rell (R) of Connecticut had the third worst score of only 28 with a grade of F. Nonetheless, the Republicans in this report's time-frame and also that of the 2008 report ( R 55 - D 46) scored significantly higher than did the Democrats.
Edwards points out that some governors think businesses are simply cash cows to be milked for higher state spending. Prime examples are Quinn of Illinois and Kulongoski of Oregon. Others, such as Carcieri of Rhode Island, Manchin of West Virginia, and Pawlenty of Minnesota understand that lower state taxes on businesses help state businesses to compete with those in other states and with those in other countries. Edwards advises that corporation income taxes be abolished because they decrease jobs, create huge compliance burdens, and raise relatively little revenue.
In the last two years, nine states increased their top income tax rates: California, Connecticut, Delaware, Hawaii, New Jersey, New York, North Carolina, Oregon, and Wisconsin. Three states have cut their top income tax rate: North Dakota, Rhode Island, and Vermont. Governor Carcieri of Rhode Island was outstanding in cutting the state's top income tax rate from 9.90% to 5.99%.
We need to pay attention to the assault on our liberties due to the growth of local and state governments as well as that from our voracious federal government. This list also gives us a scorecard for the several governors who are running for the Senate in this election or who are being discussed as potential presidential candidates in 2012. You might note that Charlie Crist of Florida has only a grade of D. Among governors talked about as potential presidential candidates, Bobby Jindal had an A, Tim Pawlenty had an A, Rick Perry had a B, Mitch Daniels had a B, and Haley Barbour has a C.
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