Thursday, September 30, 2010

Cato Gives Richardson a B. Very Strange.

Today a definitely conservative outfit, the Cato Institute, issued a new report about state governors. The title is, “Fiscal Policy Report on America’s Governors: 2010.” See Bill Richardson gets a B, which has to seem very strange to those of us who have watched the state’s rolling revenue/spending saga and disaster since 2007.
One comment makes me wonder all the more. “The tax credit disease is best illustrated by the explosion in film production incentives.”
The report says it grades “success at restraining taxes and spending since 2008.” Therein lies the explanation. That was about when New Mexico’s fiscal situation hit the fan. Since then we have watched the heroic efforts of the Legislative Finance Committee and the continued evasions of the administration.
Maybe, also, Cato is bound by its methodology. New Mexico’s film subsidy isn’t a tax credit. It’s a direct cash rebate, so perhaps it doesn’t count for Cato. Still, the B is weird.
Richardson’s horse sanctuary is not even the latest example. My new champ in the “Doesn’t Get it” category is the entire administration.
The LFC’s September newsletter, distributed yesterday, says,
“State Agencies Seek 23 Percent Increase.
In budget requests submitted September 1, state agencies seek a 23 percent increase in appropriations from the general fund, a $493 million jump. The largest increases were in the budget requests for the Human Services and Health departments, mostly to replace the federal Medicaid dollars. The federal match had been increased for the last two years but the enhanced rate is scheduled to expire.”
Cato’s Richardson evaluation follows:
“Bill Richardson, Democrat
“Legislature: Democratic
“Grade: B
“Governor Richardson has carried through on phased-in income and capital gains tax cuts he put in place seven years ago. The top income tax rate fell from 8.2 percent in 2003 to 4.9 percent in 2008. Richardson has supported other modest tax cuts, but they have not been pro-growth reforms like his income tax cuts. In 2009, for example, he signed into law energy tax credits and one-time income tax rebates. The governor has supported some tax increases. In 2010, he signed into law an increase in the gross receipts tax rate, a broadening of income and sales tax bases, and a cigarette tax increase. On spending, Richardson allowed the budget to balloon during the middle of the decade, but he has cut back recently. Between FY03 and FY09, the general fund budget increased 49 percent. However, Richardson's proposed spending for FY11 is down 11 percent from the peak in FY09.”

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