Governor Gary Herbert’s Fiscal Report Card

In its newly released “Fiscal Policy Report Card on America’s Governors” for 2012, the CATO Institute has weighed in on the fiscal policies of each governor from a limited-government perspective. How did Utah’s Governor Gary Herbert fare?

In Herbert’s re-election ads, such as this one, he touts Utah’s pro-business rankings from a variety of groups and praise received for the economic climate in this state. But an analysis of taxes and spending alone, rather than how well private businesses are doing (in spite of taxes and spending), results in a not so favorable grade for the Governor.

In CATO’s analysis, Governor Herbert received a “D” and was ranked 37 out of 50. Summarizing its ranking, CATO writes:

Utah is a generally inviting state from a tax perspective, particularly since a 2006 reform that replaced a personal income tax that had multiple rates of up to 7 percent with a 5 percent flat tax. Governor Herbert hasn’t undone his state’s positive tax climate, but his record is not particularly good. On the one hand, he cut the state’s unemployment insurance tax rate. But on the other hand, he approved a tax increase on hospitals and allowed to pass a $1.01 per pack tax increase on cigarette consumers. The governor has overseen steady increases in spending in recent years, and state government employment is up 6 percent since the beginning of 2010.

Reports such as these often fail to include important details that may affect the resulting score. For example, it appears that CATO’s report did not factor in specific spending that violates the “limited-government perspective” it used. Herbert’s recent budget contains a variety of line items for big government programs and wasteful spending. Consider some of the following:

  • $34 million: Alcohol Beverage Control
  • $6 million: Tourism marketing
  • $11.6 million: Incentives to “create jobs”
  • $81 million: Community and culture
  • $1.3 million: Funding for the Huntsman Cancer Center
  • $20 million: Utah Science Technology and Research

These and a host of other examples portray a budget that aims to tax Utahns and spend their money on a variety of unnecessary programs and policies that should be privatized and left in the hands of individuals to work out amongst themselves.

Governor Herbert is quick to praise (and often to take credit for) the success of businesses around the state, but their economic productivity comes largely in spite of government intervention, taxation, and spending—not because of it. CATO’s determination that Herbert’s tax-and-spend policies gives him a near-failing grade is one indication that Utah’s fiscal situation is not as rosy as Herbert often claims it to be.

We agree with much of what the Governor says in his campaign speeches—that regulations and taxes should be decreased and that businesses should be left free to prosper. We observe a large disconnect, however, between the rhetoric and the record. And with CATO’s report, it appears we’re not the only ones.