George:
You suspect the Cato Institute of grade inflation because its latest fiscal report card on the nation?s governors has Mike Easley getting a ?C.? But the problem isn’t really lower standards, it’s bad data.
Judging by the statistics listed in the report, it seems that Cato did not accurately score the 2001-03 record of Easley and the NC legislature. For example, the half-penny sales tax that passed in 2002 ? this was the permanent hike, not the temporary 2001 hike that is becoming permanent in effect ? does not seem to be in the Cato data. If its fiscal impact had been added in, no doubt Easley would have seen his grade fall into the ?D? category.
Why was it left out? Probably because the tax hike was so convoluted. First, the 2002 bill authorized counties to impose a ?local-option? hike of half a penny on the sales-tax rate. But then it took away $334 million in annual tax imbursements to the counties, which accounts for a large majority of the revenue expected from the tax hike (a little over $400 million). In effect, the budget made counties raise taxes primarily to cover a state fiscal hole. Cato did not classify this as a state tax increase, it seems, which is understandable but an oversight on its part.
Thus, not grade inflation but a grading error.
