National Think Tank Grades Haslam Dismal on Fiscal Policy

Despite GOP control of state government, Tennessee can’t muster better than a ‘D’ on Cato’s semi-annual report card

Gov. Bill Haslam allowed state spending to rise and approved a tax increase on hospitals, factors that earned him a ‘D’ in a libertarian policy group’s new report on governors’ fiscal policies.

Haslam oversaw an increase in state general fund spending in his first year in office, the report by the Cato Institute says. He also supported raising the state’s hospital tax.

The report awarded more favorable rankings to governors who curbed taxes and spending.

From the report:

As governor, his best fiscal move so far is to repeal Tennessee’s inheritance tax. Haslam says that the tax is prompting “a whole lot of people” to leave the state because “it’s cheaper to die in Florida.” Haslam originally called for an increase in the exemption amount, but he ultimately agreed to a full phase-out of the inheritance tax over three years.

Haslam also signed a small cut in the sales tax on groceries.

Balancing out those tax cuts, Haslam approved an increase in the state’s hospital tax from 3.5 to 4.5 percent of hospital net income. Haslam has also been leading the charge to increase taxes on Internet sales.

State general fund spending rose about 14 percent during Haslam’s first year in office, which was a key factor in the governor’s low grade.

Haslam’s ranking of 43 on a 100-point scale put him behind Gov. Andrew Cuomo, of New York, and ahead of Gov. Martin O’Malley, of Maryland. Both are Democrats. The highest scores went to Gov. Sam Brownback, of Kansas, and Gov. Rick Scott, of Florida, both Republicans.

Cato said in its report that GOP governors are “a bit more fiscally conservative” than their Democratic counterparts, though “advocates of smaller government often lament that politicians of both major parties tax and spend too much.”

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