Rhode Island
Don Carcieri
Elected: 2002
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A former business executive who entered politics only four years ago, Carcieri has loaded up his annual budgets with start-up incentives, funding for incubators, and business loan programs. But the single biggest obstacle to entrepreneurship in Rhode Island is the tax code. Businesses in the Ocean State face some of the highest rates and most complicated requirements in the country. After years of haggling, Car cieri and the Democratic-led general assembly agreed in 2006 on a set of tax reforms that, while not exactly comprehensive, are a good start--including an alternative flat tax that will lower the effective top income tax bracket to 5.5 percent from 9.9 percent over five years.
Carcieri has also made containing health insurance costs a priority, but his proposals seem to change on an annual basis. In 2002, he proposed allowing businesses to join the state's Medicaid supplement, but he has been mum on that idea since taking office. In 2005, he made medical savings accounts a priority. This June, he and the legislature finally agreed to let insurance companies offer cheaper, stripped-down packages to small businesses and the self-employed--though the plan falls far short of other states' efforts.
South Carolina
Mark Sanford
Elected: 2002
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Sanford came into office proposing to contain health care costs and reform workers' compensation. He has been unable to move forward on many of his agenda items because he was busy fighting with the legislature over a major tax cut at a time when Moody's was dropping South Carolina's credit rating. The state senate rejected Sanford's bill several years in a row before passing an alternative bill, a $130 million tax break for small businesses. After initially opposing the second bill, Sanford signed it. He then claimed credit for the measure, which helped him secure the first endorsement in a governor's race from the state NFIB in the organization's history. "Our signature issue has been correcting the disparity in the state between the way small business is taxed and the way corporations are taxed," says Joel Sawyer, Sanford's press secretary.
Also that year, Sanford opposed a plan to pay to extend Medicaid to some 60,000 small-business employees by raising the cigarette tax, a bill that was heavily supported by the South Carolina Small Business Chamber of Commerce.
South Dakota
Mike Rounds
Elected: 2002
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Abortion has dominated the politics of South Dakota during Mike Rounds's tenure. At the same time, the governor has quietly led the state in a number of alternative energy initiatives. In 2003, Rounds pushed through a law that changed the way wind farms are assessed, reducing the tax burden on these projects by 70 percent. The state also invested $265 million to bring four new ethanol processing plants online. Last year, Rounds signed a law making new biodiesel facilities eligible for a 100 percent contractor's excise tax exemption. Agricultural processing equipment used in these facilities is now tax exempt as well. Rounds's other contributions include boosting school funding, working with farmers to minimize the economic damage done by severe droughts, reducing workers' compensation costs, and developing five science research centers tied to South Dakota State University.
Tennessee
Phil Bredesen
Elected: 2002
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Having launched his own health-management firm in 1980, Bredesen is one of the few entrepreneurs among the current governors. Early in his first term, he made fiscal policy a priority. A 2003 budget, marked by deep cuts to state agencies, protected most programs aimed at K through 12 and college education. Tennessee now enjoys a $106 million surplus, and Bredesen's 2007 budget boosts pre-K enrollment and teacher pay.
Like other governors, Bredesen has struggled to address health care reform. In 2005, in the face of mounting costs, he made the controversial decision to drop 170,000 adults from the state's Medi caid supplement program. The following May, Bredesen won passage for a new plan, Cover Tennessee, a voluntary program in which businesses, the state, and employees split the cost for portable health insurance. The state estimates that the plan will enroll 185,000 of the state's uninsured over the next three years; it has won some praise from the small-business community. And because it is not tied to federal matching funds, Bredesen says, the state can deploy resources through the program to meet changing health needs. (A separate plan will insure 67,000 people dropped from the Medicaid program who have acute health needs.)
