Sundquist "Fiscally Reckless"
An article in the Friday Wall Street Journal calls Gov. Don Sundquist of Tennessee "fiscally reckless," but praises other governors for cutting taxes and trimming spending.

Here are some excerpts:

Most governors have complained that the financial troubles are a result of factors beyond their control: the recession, the stock market slump, new spending requirements as a result of terrorism, and exploding health-care costs. In truth, the primary culprit has been the profligacy of the nation's governors themselves. In the past 12 years state budgets have increased by more in dollar terms ($240 billion) than they did in the previous 100 years. State spending in the late 1990s grew twice as fast as the federal budget did: The governors somehow managed to outspend Bill Clinton.

Bill Owens of Colorado ... was recently praised by National Review as "America's best governor." He is also one of the most fiscally tight-fisted. Thanks to a model state spending limitation measure, Mr. Owens has provided tax rebates to Colorado citizens four years in a row, saving the average Colorado family $1,500. He also cut the income tax rate from 5% to 4.75%; slashed the taxes on capital gains, interest, and dividends; and businesses have received property tax relief. Colorado's economy has flourished.

Roy Barnes of Georgia may be the pre-eminent tax-cutting Democrat on the national scene. In his first year in office he pushed a Taxpayer Bill of Rights that has saved Georgia homeowners $350 million so far. He has also cut the unemployment insurance tax in Georgia, resulting in tax relief of over $1 billion to businesses and workers. He now wants to cut the state capital gains tax. When the recession hit, Mr. Barnes imposed a freeze on state hiring and made across-the-board cuts of 2.5% in the 2002 budget and 5% in the 2003 budget. No wonder Gov. Barnes is considered a potential presidential contender.

The lesson of the 1990s is that governors can't tax their way back to prosperity. An analysis by the American Legislative Exchange Council of state tax policy during the past decade found that the 10 states that cut taxes the most created twice as many new jobs as the 10 states that raised their taxes the most. In investment terms, it's always wise to short states that are raising tax rates.

(For more on Sundquist's fiscal recklessness, and the alternative path of fiscal sanity that Tennessee voters can opt for in the November election, scroll down to my Sept. 20 post "Sundquist Gets Failing Fiscal Grade.")