This week has yielded several rather disappointing pieces of news when it comes to America’s long term fiscal health. A disappointing debt ceiling compromise was passed by Congress and signed into law by the President earlier this week. As Governor Palin put it on Hannity earlier this week, “ [w]hat they have just done to this country, Sean, is hand the most liberal president we’ll probably ever see in our lifetime an opportunity to spend even more money that we don’t have. To create more debt thinking that’s going to get us out of debt?” The debt ceiling deal was “supposed “ to quash economic fears and provide stability, but it has done nothing of the sort. Yesterday, the Dow fell 513 points yesterday. Tonight, a report was just released stating that Standard and Poor’s is going to downgrade America’s credit rating. News also came out today that the deficit for this fiscal year has surpassed $1 trillion with two months still to go. With all of this sobering financial news and with an election horizon, would it not behoove the American people to elect an executive who is willing to make tough choices with the budget and address the debt and liabilities that America holds?
Governor Palin was a frugal budgeter as the Governor of Alaska. During her tenure, she cut spending 9.5% while also vetoing nearly half a billion dollars in spending. She did this during strong economic times. It should be noted that in addition to the traditional budget and capital budget that states are responsible for implementing, state governors are also responsible for managing their state debts and liabilities. These are often tied to bonds (both state and municipal) and state worker pensions and the like. Stacy has addressed this before, but Pennsylvanians4Palin has a great post that expands upon this topic by comparing and contrasting the records of Governors Palin, Perry, Pawlenty, Romney, and Huntsman in dealing with state debt and liabilities. Compared to all other candidates and potential candidates, Governor Palin increased the debt at a much slower rate and reduced total liabilities at a much higher rate than any of her fellow governors. Pennsylvanians4Palin shares:
Of the five governorships examined, Alaska under Palin saw the smallest increase in total debt outstanding (12.7% cumulatively, 4.2% per year). Texas under Perry performed worst, with total debt increasing 20.5% annually, almost tripling during his term (a cumulative increase of 184.2%).
On a per capita basis, only Utah under Huntsman performed slightly better than Alaska under Palin. Utah experienced a cumulative increase of 6.8%, versus 7.4% for Alaska (1.4% per year for Utah, versus 2.5% per year for Alaska). Again, Texas under Perry ranks last, with an astonishing cumulative increase in debt per capita of 140.4% (15.6% on an annual basis).
Cumulative Change in Debt Outstanding During Governorship
Average Annual Change in Debt Outstanding During Governorship
Alaska under Palin was the only state to see a reduction in total liabilities (34.6% overall, 11.5% per year), due in large part to the Governor’s insistence that the State’s surplus be used to pay down unfunded pension obligations and forward-fund education. All other states experienced cumulative increases in total liabilities, ranging from 19.5% for Massachusetts under Romney to 60.6% for Texas under Perry. On an annualized basis, other states showed increases ranging from 4.9% for Massachusetts under Romney to 8.2% for Utah under Huntsman.
Under Palin, Alaska’s total liabilities per capita fell 37.7% (12.6% per year). All other states experienced cumulative increases, ranging between 18.7% (Massachusetts) and 34.3% (Minnesota), and annual increases, averaging between 4.0% (Texas) and 4.9% (Minnesota and Utah).
During the fiscal years for which Sarah Palin exercised budgetary authority as Governor of Alaska (FY08 through FY10)
• Debt outstanding increased 12.7%, or 4.2% per year
• Per capita debt outstanding increased 7.4%, or 2.5% per year
• Total liabilities decreased 34.6%, or 11.5% per year
• Total liabilities per capita decreased 37.7%, or 12.6% per year
During the fiscal years for which Jon Huntsman exercised budgetary authority as Governor of Utah (FY06 through FY10)
• Debt outstanding increased 21.0%, or 4.2% per year
• Per capita debt outstanding increased 6.8%, or 1.4% per year
• Total liabilities increased 41.1%, or 8.2% per year
• Total liabilities per capita increased 24.5%, or 4.9% per year
During the fiscal years for which Tim Pawlenty exercised budgetary authority as Governor of Minnesota (FY04 through FY10)
• Debt outstanding increased 66.0%, or 9.4% per year
• Per capita debt outstanding increased 58.5%, or 8.4% per year
• Total liabilities increased 40.7%, or 5.8% per year
• Total liabilities per capita increased 34.3%, or 4.9% per year
During the fiscal years for which Mitt Romney exercised budgetary authority as Governor of Massachusetts (FY04 through FY07)
• Debt outstanding increased 44.3%, or 11.1% per year
• Per capita debt outstanding increased 43.3%, or 10.8% per year
• Total liabilities increased 19.5%, or 4.9% per year
• Total liabilities per capita increased 18.7%, or 4.7% per year
During the fiscal years for which Rick Perry exercised budgetary authority as Governor of Texas (FY02 through FY10)
• Debt outstanding increased 184.2%, or 20.5% per year
• Per capita debt outstanding increased 140.4%, or 15.6% per year
• Total liabilities increased 60.6%, or 6.7% per year
• Total liabilities per capita increased 35.8%, or 4.0% per year
Please read the whole post (which includes more tables and graphs) from Pennsylvanians4Palin here.
As Pennsylvanians4Palin mentioned in their post, Governor Palin reduced Alaska’s liabilities in part by addressing their pension system. Governor Palin wrote in a Facebook post in December of 2010:
My home state made the switch from defined benefits to a defined contribution system, and as governor, I introduced a number of measures to build on that successful transition, while also addressing the issue of the remaining funding shortfall by prioritizing budgets to wrap our financial arms around this too-long ignored debt problem. When my state ran a surplus because we incentivized businesses, I didn’t spend it on fun and glamorous pet projects for lawmakers – though that would have made me quite popular with the earmark crowd. In fact, I vetoed more excessive spending than any governor in our state’s history, and I used the state’s surplus to bring our financial house in order by paying down our unfunded pension plans that some other governors wanted to ignore. This fiscal prudence didn’t make me popular with the state legislature. In addition to vetoing hundreds of millions of dollars in wasteful spending, I put billions of dollars into savings accounts for future rainy days, much like most American families do in responsibly planning for the future. I also enacted a hiring freeze and brought the education budget under control through a commitment to forward-funding. I returned much of the surplus back to the people (it was their money to start with!) through tax relief and energy rebates. I had proven as the mayor of the fastest growing city in the state that tax cuts incentivize business growth, and though the state legislature overrode some of my veto cuts and thwarted an additional tax relief request of mine, the public was supportive of efforts to rein in its government.
It’s one thing to veto spending and reduce the size of government when your state is broke. I did it when my state was flush with revenue from a surplus – though I had to fight politicians who wanted to spend like there was no tomorrow. It’s not easy to tell people no and make them act fiscally responsible and cut spending when the money is rolling in and your state is only 50 years shy of being a territory and everyone is yelling at you to spend while the money is there to build. My point is, if I could fight this fight in Alaska at a time of surplus, then other governors can and should be able to do the same at a time when their states are facing bankruptcy and postponing this fight is no longer an option.
Governor Palin had courage enough to take on pension reform and reduce spending when times were good. Now, with the economy circling the drain, America is in need of a leader who is willing to do the same…again. That is why she has spoken of the need to reform entitlements. That is why she called out President Obama for his hypocrisy and inability to prioritize spending during the debt ceiling debate. That is why she criticized Governor Romney for weighing in on the debt ceiling only after a deal had been reached. Now is not the time for hypocrisy, incompetent leadership, or retrospective armchair governing. Now is the time for a President who already has “womaned up” and led on a state level and is ready to do the same on a federal level.