Wednesday, September 19, 2007

Money, money, money by the pound...

The State will have a billion dollar surplus for the next fiscal year. I'm sure dollar signs are dancing before legislators heads. In their dreams they are allocating dollars to pet projects that have no legitimate reason to be funded by state taxes, like a stadium in Podunk for Boll weevil races or a Ferris wheel for a local fair. Even local sewer systems should not be funded by state taxes (like they were this year). That is a responsibility to be borne by the local tax base.

The state can, by law, only spend the surplus on one time non-reoccurring expenditures. This means we will probably see a lot of capital improvements being championed by lawmakers. This law needs to change. There should be only two options for the state to pursue in spending a surplus, refunding the overcharged taxpayers or retiring debt.

Yes, overcharged taxpayers. The state sets a budget and tax rates accordingly. The difference between the budget and the state tax revenue should be as close to zero as possible. Instead we get this. "Oops, we collected an extra billion dollars. Vote buying time!!! Yee-haw!! " intoned the legislators as one. A refund would amount to $233 per man, woman and child in Louisiana ($932 for a family of 4). A lot of people could use that. You have to ask, who could better spend that money, you or the government? If you answered the government, you need help.

Some might argue that $233 is not a lot of money and the state could use the billion on good projects. Lets put that $233 in perspective.

(The following websites were used to generate the proceeding numbers [1], [2] table A-7)

The average worker in LA paid $2,102.97 in taxes in 2006. This includes income tax per employed person, sales tax per capita, property tax per capita and corporate income tax per capita. My reasoning for the property and corporate taxes in that they are paid by individuals, not businesses. Homeowners pay property tax, renters pay the landlord's property tax as part of their rent, and customers pay business' property tax as part of the price of goods and services. Same thing goes for corporate income tax.

$233 is 11% of the taxes paid. Would you mind if a store charged you 11% extra because they had some important things to do with that money?

A family of 4 paid $5,896.60 in the same taxes in 2006. They would be refunded $932. That is 15.8% of the taxes paid. But, hey, I guess the billion is just a tip. We are so happy with the government's performance that we gave them an extra .8%.

The only other option is to retire debt. Hard to buy votes by doing that, so don't hold your breath. This is the option that I would like them to use the most. It would be beneficial in the long term to the state, but lawmakers can't see past the next election. At least put this advice to use in your personal life. If you ever receive a one time sum of money, retire debt before you spend it on something else. And for the love of God, don't use it to incur more debt. If you do, the state legislature has a few openings, you'll fit right in.

If they use the whole thing toward the Road Home program, that would be OK too. But that won't happen either. I wager a whole paycheck that 100% of the surplus does not go toward the Road Home. Any takers?


Anonymous said...

Yeah! We want our money back! And screw Road Home - I see too many people with no damage getting big checks. Fuckem.

told yall so said...

I think we need to spend the money on curbing the gas emissions which are causing global warming. Our President, the Leader of the Free World, has now admitted that there is a cause for this problem and that the US must now do our part.

Last month, Bush told me the gasses were not warming the planet - so I knew they weren't. Now he says they are - so they are. I will follow whatever you say great leader. Ill even go to war with those Iraqis for crashing the planes into the WTC.