Gary Johnson

Gary Johnson's New Mexico Fiscal Record, Denounced, Defended, and Debated

The Libertarian presidential contender was better on taxing then spending, but the power of the veto can only go so far when you are governor and the legislature ultimately controls the purse.

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Former New Mexico Gov. Gary Johnson does like to sell himself as the only true fiscal conservative, compared to the major party candidates he expects to be up against in November, if the delegates to the Libertarian Party National Convention chose him this weekend in Orlando.

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National Review attacked his spending record as governor of New Mexico in an article by James Spiller on Monday, under a rough headline saying "Never Gary Johnson."

Some of the bill of indictment against Johnson, from Spiller:

When Johnson took the tiller in New Mexico in 1995, the budget stood at $4.397 billion. When he left in 2003, it had grown to $7.721 billion, an increase of 7.29 percent a year. Of the eleven governors who filed to run for president this year (two Democrats, Johnson, and  eight Republicans), only one had a worse record on spending growth…

….Johnson inherited a debt of $1.8 billion and left a debt of $4.6 billion, a rate of increase unmatched by the 22 governors in either party who have filed for presidential primaries in the past two decades, with the exception of Governor Tom Vilsack (D., Iowa) in 2007…..

Johnson is also slammed for instituting a "refundable tax credit" to encourage filmmaking in his state, and for not being very fine-grained and specific in how he intends to reach his goal of cutting federal spending by 43 percent if he's president.

Paul Gessing of the free market think tank the Rio Grande Foundation from New Mexico appears in National Review today with a more nuanced defense of Johnson. Highlights:

Spiller "credits" Johnson with spending money he had little control over. His spending numbers include federal dollars that flow into the state for everything from Medicaid to education. Including just the General Fund that the legislature and governor must agree to each year, Johnson's first budget was $2.7 billion and his final budget, eight years later, was $3.9 billion (an increase of about 41 percent). Thus, under Johnson, New Mexico's General Fund spending grew by 4.67 percent annually, not the outrageous 7.29 percent rate cited by Spiller….

….Johnson too pushed tax cuts while in office, but [his successor as New Mexico Governor Bill] Richardson was able to follow through, taking the state's top income-tax rate from 8.2 to 4.9 percent. Richardson succeeded where Johnson failed in cutting taxes in large part because during Johnson's tenure the New Mexico legislature was controlled entirely by Democrats. These were no razor-thin margins either: Democrats held approximately 60 percent of all legislative seats…..

Gessing explains how the legislature Johnson faced stymied him from doing as much good as he would have liked to, including that "Every year Johnson proposed school-choice vouchers and every year the Democrats in the legislature killed them." Gessing agrees the filmmaking tax credit is a terrible idea.

While Johnson had the veto and used it around over 700 times—he thinks that's more than all his fellow governors at the time combined—the legislature ultimately has the power of the purse. On his way out Johnson vetoed an entire budget for 2003 but got overridden. What New Mexico spent during his administration was somewhat, but by no means ultimately, up to him.

For more context, the Cato Institute in its grading of the fiscal records of the governors during Johnson's administration had these positive things to say in their 2002 report:

Johnson….favors school vouchers, term limits, privately run prisons, lean budgets, and deep tax cuts…. In his first term, he vetoed 200 bills—many of them spending bills, which he labeled as profligate. The state Democrats made defeating Johnson their top priority in 1998, but he won anyway. ….

Through determination and wearing down the opposition, he has had legislative successes. He has cut the state income tax, the gasoline tax, the state capital gains tax, and the unemployment tax. In 2001, he wanted a further 7 percent reduction in income tax rates. The legislature cut the tax less than he wanted, so he vetoed the bill. In 1999, he vetoed a 12 cent per pack cigarette tax hike because he opposes all tax hikes. (He recently did sign off on a tobacco tax with the condition that the revenues be used to offset other tax cuts.) In 2000, he signed a residential property tax cap that will limit increases in valuations to 3 percent per year. Johnson has successfully sponsored other government reform initiatives such as an electricity deregulation bill, a 10 percent reduction in state payrolls, and a Medicaid cost-cutting plan….

The Speaker of the House in New Mexico, Ben Lujan, recently noted after an override of a Johnson veto: "There is no executive fiat in this state. The governor must have the consent of the legislature for fiscal action." That explains why Gary Johnson's grade is not even higher in this report card. [He received a "B" that year.]