The right-wing Cato Institute, based in Washington DC, recently issued a Fiscal Policy Report Card on America’s Governors for the year 2000. All 50 governors in the country received scores depending on their effectiveness in keeping state budgets from growing (in other words, limiting or cutting taxes). Of course George W Bush as governor of Texas received high marks, with the third highest score in the country (a 70 out of 100) for his tax rollbacks in Texas. And of course four out of the five top-scoring governors were Republicans.

Who was the top Democrat, scoring just two points below Bush? Our own Gary Locke, who with a score of 68 even outdid Jeb Bush of Florida, who earned a 66 for his fiscal restraint.

On the bottom of the list, the opposite partisan ratio was evident. Four out of the five incorrigible low-scoring governors were Democrats, with one Republican. The bottom two governors were Locke’s west coast Democrat colleagues, governors Gray Davis of California and John Kitzhaber of Oregon, scoring 41 and 30 respectively.

The rationale of the Cato Institute is that lower taxes result in a more robust economy. The report contains a table of the authors’ own calculations, showing that employment growth and personal income growth were higher in the top ten “tax-cutting states” in the 1990s compared to the top ten “tax-hiking states.”

However, these statistics present an interesting chicken-and-egg problem. Cato’s assumption is that tax raises cause economic problems, but instead economic problems could cause tax raises. Present economic growth could be the result of public investment due to taxes raised a decade earlier. Similarly, present economic woes could be a result of lack of taxes raised a decade earlier. Public investment in the form of raised taxes may take years to bear fruit. Even if Cato’s numbers are reliable, it may not be realistic to make same-year comparisons of economic growth and tax rates

It’s interesting to note that currently in the year 2001, Texas is reeling from budgetary problems, and California is now a job magnet compared to our own Washington.