Lee receives a 'C' in Cato's fiscal analysis

(The Center Square) – Tennessee Gov. Bill Lee was given a "C" in the Cato Institute's 17th biennial Fiscal Policy Report Card on America’s Governors.

Lee's tax policy is a combination of cuts and increases, according to the report authored by Chris Edwards. The governor signed a bill that removes 15 occupations from Tennessee's privilege tax in 2019. A bill requiring out-of-state online retailers to collect a Tennessee state sales tax was signed in 2020. Smaller cuts took effect in 2022, including a temporary suspension of the grocery tax in 2022 and another suspension in 2023, according to the analysis.

Tennessee's budget has increased under Lee's tenure, according to the report. Lee signed off on this year's budget, which includes $50 million to relocate the Tennessee Performing Arts Center. The project had already received $200 million in last year's budget, according to previous reporting by The Center Square .

"Nonetheless, he confirmed his support of smaller government in his 2024 state of the state address, saying, 'Less government is better government,' while promising to cut rules and regulations across the bureaucracy," Edwards wrote in his report .

A $144 million allocation for a universal school choice program is in the state budget but lawmakers did not pass a bill approving the program. Eligible students would have received up to $7,000. The funds for the school choice program will remain unspent in the budget, according to an analysis by the Sycamore Institute.

Lee has cut business taxes, a move that will save Volunteer State businesses about $200 million annually, according to the report.

"The reforms included a $500,000 property exemption for the franchise tax, increased depreciation deductions under the excise tax, and a $50,000 standard deduction for the excise tax," Edwards said.

Iowa Gov. Kim Reynolds received the highest grade from the Cato Institute's analysis, receiving an "A" along with governors in Nebraska, West Virginia, Arkansas, South Dakota and Montana.

Minnesota Gov. and current Democratic vice presidential candidate Tim Waltz received the lowest grade. Other states receiving an "F" are Wisconsin, Delaware, Washington, Maine and New York.