Cato Institute gives Gov. Whitmer a ‘D’ grade for fiscal policy

Michigan Gov. Gretchen Whitmer received a ‘D’ grade from a fiscal watchdog for her recent spending and tax policies.

The report from the Washington, D.C.-based Cato Institute grades governors on their fiscal policies from a limited-government perspective. Enacting tax cuts and spending reductions gives governors a higher grade while increasing taxes and spending brings a lower grade.

Whitmer scored a near-failing grade for supporting tax increases and vetoing tax reforms, the report said.

In 2019, her first year in office, Whitmer supported a plan to raise gas taxes by $2 billion annually before the Legislature rejected the idea.

Whitmer, now in her second term, avoided an ‘F’ grade because she supported a few tax cuts.

Under Whitmer, Michigan rolled back the retirement tax, expanded the earned income tax credit and repealed the tax on menstrual products.

The governor’s office didn’t respond to a request for comment.

Whitmer vetoed SB 768 of 2021, which would have saved individual and business taxes by $2 billion annually. It would have cut the corporate tax rate from 6% to 3.9% and the individual income tax rate from 4.25% to 3.9%.

The governor also vetoed a bill that would have cut the individual income tax rate from 4.25% to 4% and temporarily suspended the gas tax.

In 2023, taxpayers received a one-year cut in the individual income tax rate — which went from 4.25% to 4.05% — because of an existing law related to budget surpluses. Republicans in the Legislature wanted to keep the lower rate, but Whitmer did not.

Meanwhile, Whitmer approved a record $4.5 billion in corporate subsidies to select companies.

In 2024, Whitmer proposed a research and development tax credit, a caregiver tax credit, and a one-time rebate for new vehicle purchases. The rebate would have been $1,000 for gas-powered cars and $2,000 for electric vehicles, with a $500 bonus for union-made cars. Michigan did not adopt any of these proposals.

Six governors across the nation received ’A’ grades, nine received ’B’ grades, 17 received ’C’ grades, and six received ’D’ grades.