NCPA - National Center for Policy Analysis


March 22, 2007

The Democrats on Capitol Hill are promising a new ethic of fiscal responsibility as the party desperately tries to shed its tax-and-spend label of recent decades.  But if spending restraint and balanced budgets are the new Democratic rallying cry, someone forgot to alert the governors, says the Wall Street Journal.

  • Last year states cashed in on the boom times by hiking expenditures by almost 9 percent, according to the National Association of State Budget Officers, or three times the rate of overall inflation.
  • This year at least a dozen states are contemplating double-digit rates of spending growth; if that happens, aggregate state budgets will be up nearly 20 percent in just two years.

Which states have big spending governors?

  • Illinois Gov. Rod Blagojevich just recently announced a $60.1 billion budget loaded with $7 billion in new taxes and $16 billion in new debt -- what the Chicago Sun Times calls "the largest tax increase and biggest borrowing spree in state history."
  • Michigan Gov. Jennifer Granholm is seeking a $1 billion-plus tax business tax increase to fund what she's calling her "invest in Michigan" budget which socks businesses in Motor City with a higher tax bill.

Other big spenders:

  • Montana Gov. Brian Schweitzer wants to hike spending by nearly 15 percent this year.
  • North Carolina's Mike Easley has proposed a 7.5 percent spending hike financed by extending "temporary" sales and income tax hikes passed during the 2001 recession.
  • Ed Rendell of Pennsylvania seeks a $60.3 billion budget, a $4,500 budget increase per family of four since he entered office in 2003.
  • New Mexico is so flush with cash from the oil boom that Gov. Bill Richardson has requested a 10 percent hike in spending this year, including $100 million for a space launch pad.

Source: Stephen Moore, "State Spending Spree," Wall Street Journal, March 22, 2007.

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