WASHINGTON -- Republican Governor Matt Blunt of Missouri earns the highest score on the Cato Institute's eighth biennial fiscal policy report card released today.  Out of 46 governors reviewed, Blunt is the only governor this year to receive the grade of A for cutting his state's budget, eliminating hundreds of government jobs and restraining Medicaid spending.

The "Fiscal Policy Report Card on America's Governors: 2006," by Cato director of budget studies Stephen Slivinski, emphasizes the importance of tax cuts and provides evidence showing that "states that reduce taxes improve their prospects for economic growth."

The latest report card grades 46 governors on 23 objective measures, awarding the highest grades to those who have reined in spending and cut taxes.  Governors from four states (Alaska, Idaho, New Jersey and Virginia) were excluded from the study either because they assumed office too recently or for technical reasons.

Other key findings of the report include:

• Constitutional spending restraints and tax cuts are arguably the best solution for bloated budgets during boom years and for out-of-control deficits during lean years.
• Flat taxes create fewer economic disincentive effects and make state revenue less volatile.
• Medicaid must be reformed to avoid rising healthcare costs from consuming state budgets.