FISCALLY FIT: Who Are America’s Top Performing Governors?

President Donald J. Trump, joined by Agriculture Secretary Sonny Perdue, shakes hands with Iowa Governor Kim Reynolds after signing an Executive Order making changes to the E15 ethanol rule, during his visit Tuesday, June 11, 2019, to Southwest Iowa Renewable Energy ethanol plant in Council Bluffs, Iowa. (Official White House Photo by Shealah Craighead)

You may be wondering, after the last two decades, if there is anywhere left in America where fiscal conservatism remains important. The federal budget has ballooned out to Banana Republic-like proportions. It turns out there are still some pockets of America where governors put a priority on maintaining the financial strength of their states. At the Cato Institute, Chris Edwards and Ilana Blumsack have ranked America’s governors based on their fiscal performance. They write:

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.

America’s Top 5 governors on fiscal policy are:

1. Kim Reynolds of Iowa – Grade A, score 78
2. Chris Sununu of New Hampshire – Grade A, score 74
3. Pete Ricketts of Nebraska – Grade A, score 73
4. Brad Little of Idaho – Grade A, score 69
5. Doug Ducey of Arizona – Grade A, score 66

Action Line: Three of these top five states score in the Top 10 of my Super States. If you’re looking for a new America, start your search with my Super States, where politicians treat you like a valued customer, not a piggy bank. In the meantime, click here to subscribe to my free monthly Survive & Thrive letter, and I’ll push you to find the best America for you, even if that means staying right where you are.

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E.J. Smith - Your Survival Guy

E.J. Smith is Founder of YourSurvivalGuy.com, Managing Director at Richard C. Young & Co., Ltd., a Managing Editor of Richardcyoung.com, and Editor-in-Chief of Youngresearch.com. His focus at all times is on preparing clients and readers for “Times Like These.” E.J. graduated from Babson College in Wellesley, Massachusetts, with a B.S. in finance and investments. In 1995, E.J. began his investment career at Fidelity Investments in Boston before joining Richard C. Young & Co., Ltd. in 1998. E.J. has trained at Sig Sauer Academy in Epping, NH. His first drum set was a 5-piece Slingerland with Zildjians. He grew-up worshiping Neil Peart (RIP) of the band Rush, and loves the song Tom Sawyer—the name of his family’s boat, a Grady-White Canyon 306. He grew up in Mattapoisett, MA, an idyllic small town on the water near Cape Cod. He spends time in Newport, RI and Bartlett, NH—both as far away from Wall Street as one could mentally get. The Newport office is on a quiet, tree lined street not far from the harbor and the log cabin in Bartlett, NH, the “Live Free or Die” state, sits on the edge of the White Mountain National Forest. He enjoys spending time in Key West (RIP JB) and Paris. Please get in touch with E.J. at ejsmith@yoursurvivalguy.com To sign up for my free monthly Survive & Thrive letter, click here.

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