By Bonnie Washuk,Staff Writer

AUGUSTA – Gov. John Baldacci has earned a grade of B for how he has controlled state spending, according to the Cato Institute, a conservative Washington-based group that favors limited government and lower taxes.

Baldacci’s grade put him behind Republican Govs. Arnold Schwarzenegger of California and Craig Benson of New Hampshire, who both got A’s. Baldacci’s grade was higher than many other Democratic governors, as well as some Republicans, including James Douglass of Vermont and Sonny Perdue of Georgia, who both scored D’s.

According to the Cato report, Baldacci’s grade was the seventh-highest of 25 freshmen governors now in the middle of their first terms, said Stephen Slivinski, co-author of Cato’s Fiscal Policy Report Card on America’s Governors.

“The numbers show that Governor Baldacci gets that grade because he deserves it,” Slivinski said Thursday. The report analyzes state taxes, fees and spending, and adjusts all of that for any change in population plus inflation.

To get a good Cato grade, state budgets can only grow enough for inflation. The best grades are for governors who cut taxes and spending. Party affiliation does not affect grades, Slivinski said. “We’re equal opportunity offenders.”

Baldacci scored well mostly because of his tax policy. “We noticed he did propose a plan to cut state income taxes,” a plan which did not happen. Even so, Baldacci gets some credit for the proposal “because governors have limited capability,” and state legislators don’t always do what the governor wants, he said.

In addition, Maine’s revenue and spending did not outgrow inflation. “It kept pace,” Slivinski said. “He’s been able to keep spending under control,” he said. Governors who scored A’s were those who cut spending. “It’s our presumption that just throwing money at government programs doesn’t get you where you want to be. So there’s still room for improvement.” Baldacci’s grade could change in two years, when Cato will judge him as “a senior governor.”

One conservative Maine group disagreed Thursday with the grade Cato gave Baldacci, saying it was far too generous. Bill Becker of the Maine Heritage Policy Center called it a “bizarre ranking,” saying Baldacci should not have gotten the same good grade as Gov. Bill Richardson of New Mexico, who both proposed and cut state income taxes.

Becker complained that Baldacci has raised taxes since in office, including hospital taxes, fees, and did not enact the same tax cuts as the federal government. If state tax rates are not lowered along with federal taxes, “that is a tax increase,” Becker said.

Baldacci spokesman Lee Umphrey disagreed. “Taxes and the tax burden have come down under the Governor Baldacci. I’m surprised Becker is criticizing the Cato report.”