BOSTON -- Gov. Maura Healey is getting grades on fiscal restraint from a libertarian watchdog group, which credited the first-term Democrat for cutting taxes and pursuing "pro-growth" reforms.
The CATO Institute's 2024 fiscal report card on U.S. governors gave Healey a "B" grade for her budgetary work, citing a $1 billion tax relief package she signed last year that cut business taxes and overhauled the estate or "death" tax, which was billed as the state's first tax cut in 20 years.
"Many of Healey's tax cuts are special-interest giveaways, such as housing developer breaks, and some of her tax cuts are actually spending, such as an expansion of the refundable earned income tax credit," the report's authors wrote. "Nonetheless, Healey has approved a few pro-growth reforms, such as an increase in the estate tax threshold and a cut to the capital gains tax rate."
But CATO, which describes itself as nonpartisan, libertarian think-tank, still criticized Healey for using money from the 4% millionaires' tax to backstop some the tax breaks and increase state spending. The report's authors suggested that the voter-approved tax will "exacerbate the exodus of high earners" who it claims are fleeing the state.
"Healey's modest tax breaks will not make up for the anti-growth effects of high individual and business taxes in Massachusetts," they wrote.
The group also claims Healey "undercut her tax-cutting message" by backing legislation that would have allowed local governments to impose higher transfer taxes on property sales above a specified value."
The proposal, which was included in a $4 billion housing bill, would have raised about $400 million a year but was rejected by lawmakers.
Despite the criticism, Healey still got a better grade on fiscal restraint than her predecessor, Republican Charlie Baker, who scored poorly on previous Cato reports and received a "C' grade from the group in 2022, his final year in the governor's office.
At the time, the institute criticized Baker for "breaking his campaign promise" not raise taxes or increasing spending, specifically citing his decision to set a payroll tax on employers to fund a new paid leave benefit. The law increased taxes by $750 million a year. In 2018, Baker was given a "D" grade on fiscal restraint.
Healey also got one of the highest rankings among New England governors, including New Hampshire's Republican Gov. Chris Sununu, who got a "C' grade, and Maine's Gov. Janet Mills, who was one of five governors to get an "F" in the report.
Christian M. Wade covers the Massachusetts Statehouse for North of Boston Media Group's newspapers and websites. Email him at [email protected]