“Education Governor” Gets a C Grade

Governor Beverly Perdue received an average grade in the newest Fiscal Policy Report Card on America’s Governors from the Cato Institute. In addition to an overall grade, the report gives a score to each governor ranging from 0 to 100. Lower scores indicate governors who favor big-government fiscal policies (high taxes, high spending), while scores closer to 100 are given to governors who implement small-government, market-friendly plans. Perdue was allotted a score of 51, right in the middle of the pack.

Sadly, not even the A-grade governors came close to receiving a score of 100. The highest ranked state executives were Kansas Governor Sam Brownback and Florida Governor Rick Scott, both Republicans with scores of 69. In other words, Cato’s ranking puts Perdue in the middle of a pack of already sub-par governors.

As Civitas has reported time and again, Perdue’s crony policies, income tax hikes on the middle-class, and failures to help small business were all factors in her score. With an unemployment rate of 9.7 percent, putting us at 47^th in the nation, North Carolina needs better than average fiscal policies. Be sure to read Cato’s commentary on Perdue below and find out more from Civitas on how to fix the tax code and budget in NC.

Early in her tenure, Governor Perdue signed a giant package of tax increases that raised $1 billion annually. Middle-income households were hit with a 2 percent surtax on their incomes, and higher earners and corporations were hit with a 3 percent surtax. In addition, the state sales tax rate was raised by one percentage point, bringing the typical state-local rate in North Carolina to 7.75 percent. Perdue also broadened the sales tax base, increased cigarette taxes, imposed a new hospital tax, and hiked taxes on beer, wine, and liquor.

Perdue promised that the sales tax increase would be temporary, but in 2011 she changed her mind and proposed extending most of it. However, since the hike was put in place the legislature has flipped to Republican control and it has blocked extension of the sales tax increase.

Purdue seems undecided on the issue of business taxes. She opposed a major tax cut for small businesses last year, which passed over her veto. However, she proposed cutting the corporate income tax rate from 6.9 to 4.9 percent, but that pro-growth reform has not yet passed.