NIXON: Among the middle of the pack of American governors in fiscal policy.

By Johnny Kampis | Missouri Watchdog

ST. LOUIS – Gov. Jay Nixon is running largely on his economic record, citing in campaign ads falling unemployment rates, balanced budgets and Missouri’s AAA credit rating in his campaign ads.

But a report by the libertarian Cato Institute says the Democrat’s record of fiscal responsibility is merely mediocre when compared to the nation’s other governors. The Washington, D.C.-based think tank gave him a grade of C, ranking Nixon 23rd in the country. 

Cato tweaked Nixon largely for the state’s plethora of tax incentives, as Missouri has more than 60 programs of corporate welfare.

The state’s business giveaways have been in the forefront during this election year.

Republican Auditor Thomas Schweich criticized the state’s liberal use of tax incentives as he gave Nixon’s Department of Economic Development a mediocre grade on its annual audit in September.

Missouri Watchdog pointed out in June that a Ford supplier would benefit from $5 million in tax credits through four separate programs to build a plant in Liberty.

Nixon’s press secretary, Scott Holste, did not respond to requests from Watchdog for comment.

Nixon reconvened the Missouri Tax Credit Review Commission in August to study the state’s tax credit programs, which reported redemptions of nearly $630 million for fiscal 2012, a 15 percent jump from 2011 and an all-time high.

The governor formed that panel in 2010, but its report that year recommending the state stop allowing the stacking of incentives was ignored by legislators.

Schweich discovered in his study of the DED that Missouri issued nearly $740 million in tax breaks for 117 projects between 2000 and 2011, receiving money from multiple credits.

In a statement in announcing the renewed commission, Nixon said the board would look at ways to make tax incentives more efficient to maximize the state’s return on investment.

“Every dollar Missouri spends on economic incentives is a dollar we don’t have to invest in other critical priorities, such as education and public safety,” he said.  “I am asking this commission to refresh its thorough report on each and every state tax credit program so that we know which programs are delivering for Missouri taxpayers.”

The Cato study’s author, Chris Edwards, wrote that Nixon has “followed a centrist approach to fiscal policy. Budget growth under Nixon has been about average among the states, and he has cut state government employment since 2010. He has also signed legislation requiring state workers to contribute to their pension plans, which will reduce taxpayer costs over time.”

The report said Nixon has avoided increasing taxes on residents while focusing on business tax cuts in recent years.

“One achievement was signing 2011 legislation to phase out the state’s business franchise tax over five years,” Edwards wrote. “Nixon said that ‘phasing out this burdensome tax will encourage businesses to expand their operations and create jobs in Missouri.’”

The report leans toward a smaller government perspective, with governors favoring fewer taxes and less spending generally getting higher scores.

Kansas Gov. Sam Brownback, a Republican, topped the list, while Illinois’ Democratic Gov. Pat Quinn scored the lowest.

Republican and Democratic governors averaged scores of 57 and 43, respectively.

The report notes that Missouri is far from the only state to offer more lucrative enticements to businesses.

“With the struggling economy of recent years, a growing number of governors are trying to make their states more attractive for business investment,” Edwards wrote.

Contact Johnny Kampis at johnny@missouriwatchdog.org.  For more Missouri Watchdog updates, visit Facebook and Twitter, or sign up for a free newsletter.