Huntsman earns 'B' for fiscal policies

Gov. Jon Huntsman Jr. earned a B grade on a new fiscal policy report card compiled by the Cato Institute, a libertarian think tank based in Washington, D.C.

According to the institute's analysis, Huntsman tried unsuccessfully to eliminate the corporate franchise tax but was able to reduce sales taxes and establish a lower, 5 percent income-tax rate.

But while Huntsman reduced taxes, he increased spending, the institute found.

"Unfortunately, Huntsman has completely dropped the ball on spending, with per capita spending increasing at about 10 percent annually during his tenure," the report, available at cato.org, concluded.

"Really, this 'B' is saying we're number five in the ranking," said Huntsman spokeswoman Lisa Roskelley. "That's not to say this is a bad ranking in any way. The area where they fault his policy is that we're spending a lot of money on public education."

Roskelley said the increased spending for education was in part just to keep up with growth in public school enrollment. And, she said, "it wasn't at the expense of tax cuts that we were providing this record funding. The governor was able to achieve both."

Senate Majority Leader Curt Bramble, R-Provo, said a significant portion of the spending increase cited by the institute "is not growing government programs and is not growing government employment."

Bramble said the governor has received higher marks from other sources, including Governing Magazine, which ranked Utah the best-managed state in the country in March. But Bramble said the institute's grade "was fair given their perspective."

The report looked at tax and spending decisions made by governors since 2003, giving the highest grades to governors who cut taxes and the lowest to those who increased taxes and spending.

"Fiscal policies need to be improved if the states are to meet the huge challenges ahead," the report summary stated, saying "there has been a disappointing lack of major spending reforms among governors of both parties in recent years."

Of course, with what many are seeing as an economic meltdown, Utah and other states are dealing with budget shortfalls. Huntsman called lawmakers into special session last month to cut $272 million from the current year's budget.

The institute points out that states are also facing rising Medicaid costs as well as increased international tax competition that "makes it imperative that states cut tax rates to attract jobs and investment."