Obama Economic 'Summit' Features Tax-hiking Governors
Covering a "sober summit" held in Lake Worth, Florida that "focused on boosting jobs and capping the rising costs of healthcare," Miami Herald's Lesley Clark noted that Sen. Barack Obama was joined on stage by the Democratic governors of the swing states of Colorado, Michigan, New Mexico, and Ohio:
''A crisis like this calls for the best ideas, the brightest minds, the most innovative solutions from every corner of this country,'' said Obama, who invited the Democratic governors of four key election states to share a stage with him, along with a small business owner from Miami, former Federal Reserve chairman Paul Volcker and the CEO of Internet giant Google.
Yet the 2008 Fiscal Policy Report Card by the libertarian Cato Institute found a C-average among those Democratic governors. By contrast McCain supporter Florida Gov. Charlie Crist (R) earned an "A." Michigan's Gov. Jennifer Granholm -- who portrayed Gov. Sarah Palin (R) in Sen. Joe Biden's debate prep -- and Colorado's Gov. Bill Ritter were assigned "D"s for their advocacy of tax hikes (emphasis mine):
Since taking office last year, a main focus of Governor Ritter has been to raise taxes. In 2007, he supported freezing reductions in property taxes that are mandated under the state constitution’s Taxpayer Bill of Rights (TABOR). In 2008, he campaigned in favor of a ballot measure to increase severance taxes by about $200 million annually. Fortunately, Ritter has a better record on spending.While he has proposed new spending on education and health care, state budget growth has been modest under his tenure.
Governor Granholm has presided over one of the slowest growing states in the nation, and her tax increases have not helped matters. The biggest tax change in recent years was to the Michigan Single Business Tax (SBT). The tax was generally hated by businesses, and there was wide agreement that it should be repealed. In 2007, Granholm and the legislature agreed to replace the SBT with the Michigan Business Tax (MBT), but the new tax is turning out to be just as complex and unpopular as the SBT, and it may cost businesses more money. In other tax policy initiatives, the governor proposed a $1.5 billion sales tax increase to close a budget gap in 2007. The plan was rejected, and the governor replaced the expected revenues by increases in personal income taxes and the MBT. The top personal income tax rate was increased to 4.35 percent, and a tax surcharge of 22 percent was imposed on the MBT. Granholm’s fiscal record also includes a large tax increase on cigarette consumers.
New Mexico's Gov. Bill Richardson and Ohio's Gov. Ted Strickland were given "B" grades, in part because of their work in actually cutting taxes. Here's what Cato has to say about Florida's Gov. Crist (R), a McCain backer:
Governor Crist has promoted major property tax reductions. In 2007 he signed into law House Bill 1B, which required local governments to roll back a portion of recent property tax increases and set limits on future tax growth. This law will initially save taxpayers up to $2.2 billion annually, and the savings are expected to increase over time. Crist also pushed for passage of Amendment 1, which was approved by voters in January 2008. It increased homestead exemptions and allowed portability of tax relief that people enjoy on their current homes from an existing property tax cap. Amendment 1 is expected to cut taxes by about $1.3 billion in the first year, and rising amounts thereafter. House Bill 1B and Amendment 1 are large tax cuts, but they are complex and they create various economic distortions. On spending, Crist has promoted restraint. General fund spending levels were roughly flat in his first
two budgets, and he frequently uses his line item veto to strike unneeded spending from bills.