Rick Perry vs. the World *
Tracking the 2006 Texas gubernatorial race.
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Wednesday, March 02, 2005
Perry gets a B from Cato
Don Jordan writes in the Houston Chronicle about the Cato Institute's Fiscal Report Card on the governors. Cato's report grades how well governors do at cutting taxes and cutting spending.

2 governors received A's: Schwarzenegger and Craig Benson, who lost his re-election in NH. 11 governors received B's; Perry's score was the lowest of those who received B's.

Here is the text of the Cato evaluation of Perry:
As George W. Bush's lieutenant governor, Rick Perry was a key player in getting Bush's tax cuts passed. When he succeeded Bush as governor, he decided to take things slow at first: Perry saw little room for tax cuts in the beginning. The state was still recovering from Bush's spending buildup - Census Bureau numbers show that real per capita spending went up a whopping 6.7 percent in Perry's first year in office. Perry was reelected in a 2002 landslide, pledging to oppose any new or increased taxes. With the state facing a $10 billion deficit in the 2004 - 05 biennium, Perry instituted a zerobased budget to force the state agencies to justify their continued existence and funding levels. In June 2003 the legislature passed a balanced budget that cut spending and raised various fees and charges but avoided any general tax increase. In 2004 Perry proposed a $6 billion property tax cut, along with a property tax limitation measure that would prevent property taxes from increasing by more than 3 percent a year. To pay for his property tax cut, Perry also proposed a massive cigarette tax hike of $1 per pack. Perry called the legislature into special session to consider his tax plan, but the legislature took no action. Tax reform and education financing are subjects of ongoing debates in Texas, and Perry has been outspoken in his opposition to an income tax. His plan is to cut property taxes, which are high in Texas, and perhaps institute a statewide business tax. He insists that any tax reform plan should be an overall tax cut. With a few exceptions, Perry's fiscal record so far indicates that Texas taxpayers are in good hands.

Performance Data
6.7% Average Annual Change in Real per Capita Direct General Spending through 2002
6.0% Average Annual Change in Direct General Spending per $1,000 Personal Income through 2002
-2.1% Average Annual Recommended Change in Real per Capita General Fund Spending through 2005
-3.2% Average Annual Change in General Fund Spending per $1,000 Personal Income, 2002–2005
1.8% Average Annual Change in Real per Capita Tax Revenue through 2002
-6.1% Average Annual Change in Tax Revenue per $1,000 Personal Income through 2002
-2.4% Average Annual Recommended Change in General Fund Revenue per $1,000 Personal
Income through 2005
-2.5% Average Annual Change in Real per Capita General Fund Revenue, 2002–2005
0.7% Average Annual Recommended Tax Changes as % of Prior Year's Spending through 2005
n/a Change in Top Personal Income Tax Rate, proposed and/or enacted (% points)
0.0 Change in Top Corporate Income Tax Rate, proposed and/or enacted (% points)
4.5 2004 Combined Top Income Tax Rates, personal plus corporate
0.5 Change in Sales Tax Rate, proposed and/or enacted (% points)
0.0 Change in Gas Tax Rate, proposed and/or enacted (cents per gallon)
100 Change in Cigarette Tax Rate, proposed and/or enacted (cents per gallon
Here's excerpts of Jordan's HouChron coverage:
Gov. Rick Perry's approach to property and income taxes earned him good marks in a report on 2004 fiscal policy issued Tuesday by a libertarian-oriented think tank.

The Cato Institute gave a "B" grade to Perry and five other governors who have served more than one term.

Two other such governors got an "A."


"The fact that he has not made any movement toward raising or instituting a wage or income tax has been one of the reasons he got a high grade in our report," said Stephen Moore, senior fellow with the institute. "He's been a real spectacular governor in my opinion."

Cato, which calls itself "market liberal" as it supports limited government and free market policies, publishes the report every two years.


Based on Perry's score, "Texas taxpayers are in good hands," the report stated.

Moore said Perry did a good job of finding government waste and cutting agency budgets, "and he did a wonderful job of weathering the fiscal storm."

Facing more financial problems, Perry last month said he would be open to increasing the state gas tax to match inflation. The tax will raise almost $3 billion this year, behind the pace of increasing costs of building and maintaining highways.

Some of Perry's critics claim the governor's earlier tax-limiting policies were enacted at the expense of important social programs.

U.S. Sen. Kay Bailey Hutchison, R-Texas, threw political jabs at Perry this year when she criticized Texas for giving up $104.6 million in federal funds for children's health insurance after the state refused to spend money that would make the funds available. She is considering a run for governor next year.

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