Report ranks Scott as 7th most fiscally responsible governor in U.S.

By David Flemming

The Cato Institute gives Gov. Phil Scott high marks for his fiscal stewardship. It recently published the “Fiscal Policy Report Card on America’s Governors 2020,” which uses publicly available data to assess the fiscal performance of the governors and how they restrained or grew the size of their state’s government from January 2018 to August 2020.

“Governors who received a grade of A have focused on reducing tax burdens and restraining spending. Governors who received a grade of F have pursued government expansion.”

How did Governor Scott do? His “B” grade was better than the governors in Connecticut, Massachusetts, Maine, and Rhode Island, all of whom received a “D.” Only Chris Sununu of New Hampshire did better than Scott in New England, with an “A.” Scott got the 7th best mark for a governor in the country. These grades were assigned based on how each governor averaged in three categories from when they started in office—spending growth (the less the better), tax revenue growth (the less the better), and tax rates (the lower the better).

The spending category looks at the change in spending of in a state’s General Fund budget (which governors have the most influence over), and factoring in population growth to attain a per capita figure (growing states like Massachusetts can afford to spend more than stagnant Vermont). Scott’s average proposed spending was an increase of 2.9% (adjusting for population change), which is nearly identical to the actual change in per capita spending for Vermont of 3.0%. The proposed and actual changes are averaged to find the spending score. Aside from Sununu, the only New England governor with a better spending score than Scott was Connecticut’s Ned Lamont (56 vs. 66), but Scott far surpassed Lamont in the revenue category (73 vs. 14).

The second category “changes in tax revenues” was where Scott outpaced many of his governor colleagues. Due to Scott’s vetoes and negotiations with the legislature, Vermont’s overall taxes are 0.8% lower since 2018 (though some individual Vermonters may still face tax increases). In contrast, governors in Connecticut, Massachusetts, Maine, and Rhode Island all contributed to raising taxes since 2018.

For the tax rate category, changes in corporate, personal income, and sales tax rates were all considered. Scott and Sununu were also the only New England governors to oversee a tax rate decrease since 2018, giving them a higher tax rate score than their colleagues. Scott’s was a reduction in personal income tax rate while Sununu was a reduction in the corporate income tax rate.

Scott’s spending growth score (56) tax revenue score (73), and tax rate score (54) combined for a 61 average or “B.”

Cato says of the Vermont Governor: “Scott has battled with the Vermont legislature in his efforts to restrain taxes and spending, and he has issued numerous vetoes. He has been a frugal budgeter: general fund spending rose at an annual average rate of just 2.4 percent between 2017 and 2020.”

Cato notes that their scores are not meant to paint a complete picture of a governor’s fiscal responsibility. “States grant governors differing amounts of authority over budget processes. For example, most governors can use a line-item veto to trim spending, but some governors do not have that power.”  Vermont joins New Hampshire, Rhode Island, Indiana, Nevada and North Carolina as being the only states in the US which do not grant the governor line-item veto power to trim unnecessary spending. This makes Scott’s fiscal stewardship even more impressive. The entire Cato report can be found here.

David Flemming is a policy analyst for the Ethan Allen Institute. Reprinted with permission from the Ethan Allen Institute Blog.

Image courtesy of Vermont National Guard

8 thoughts on “Report ranks Scott as 7th most fiscally responsible governor in U.S.

  1. I’m not a fan of Gov.Scott, but this gives me a little hope for the state,
    just think if we had more conservatives making legislation and not trying
    to stop him at every turn, yup they have the majority and they know it.

    So as Nov 3rd comes around, the Governor will get my vote, I can only
    imagine if Zuckerman was to take control of the top job and all the liberal
    spending policy fools in the statehouse…… Wow, you think the states in
    finanical trouble now ……..

    We can vote for people that care about the state or those that only care
    about an agenda, wake up people…… It’s our state not their’s.

  2. It would be nice to see what Phil Scott would do if he had a Republican legislature. Certainly the lack of tax base helps keep taxes down. If David Zuckerman were to be governor, with the same legislature, I would expect there would be an exodus from Vermont of those who would have to shoulder the burden and perhaps an influx of those who might benefit from Zuckerman’s vicarious philanthropy.

  3. I hope those who are critical of Phil Scott had a chance to listen to David Zuckerman the Progressive/Democratic candidate for Governor today on Vermont Public Radio. Talk about complaining. According to Zuckerman Scott with his 22 vetos is the biggest thing standing in the way of much needed spending and taxing and needs to be gotten rid of. While Scott may not be the first choice for some of those that read True North, he does has a sense of fiscal responsibility and much of what he has proposed over the last four years simply has not been given due consideration by the legislature.

    • “The devil you know…” adage seems to apply here. Lest we forget- the Governor is but half the equation in getting a budget passed. Zuckerman would certainly cause a train wreck to Vermont’s economy sooner than later, but until there is some parity in the legislature- we will continue toward that train wreck.
      What’s missing is a comparison in per-capita spending. That comparison might open some eyes. Compared to NH, VT spends twice as much per-capita.

  4. Was the Cato Institute having a drinking party when they gave Gov. Phil Scott high marks for his fiscal stewardship ? Because lets face the facts Scott hasn’t done anything for Vermont or it’s citizens he’s suppose to represent. He and the rich legislators have over priced Vt, over taxed Vt. Made Vt a unfriendly business State.Yeah he’s done a lot for The state and real Vermonters.

    • You are right. One thing to note that even though it doesn’t count as a tax increase, taxing online sales is a huge tax increase.

    • I agree with you DonnaB.
      Because I’m in NH and we sure would not give Sununu an ‘A’ either.
      We might be in better shape than Vermont, and the surrounding states that are off their rockers with lunacy.. but for us here, especially us natives that were raised in a genuine Red Conservative state, we are not pleased at all at what we see.
      We have debt, Bills that need to be paid that aren’t..we have issues that should be funded and taken on and yet are not. So by a normal persons standard.. I don’t see how that all earns an “A” at all.

      We should be following the money over at CATO before we put much faith in anything they say.

  5. Does it include the amount of debt incurred by issuing bonds and underfunding the state employee pension fund? They aren’t on the general fund numbers but still count.

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