Here in Oregon they do a very silly thing. The government projects how much tax revenue they expect every year. (That's not the crazy part yet.)
After the year is up they compare their projection with what they actually got. If what they actually got is more than 2% above the projection they print out a check to every tax payer in the state and return their respective portion of the budget surplus.
Last year apparently we had the largest surplus so far. So all us Oregon tax payers are awaiting our "kicker" checks which should be sent out sometime before 12/15. The state of Oregon will pay $1.3 million dollars to return $1.1 billion dollars to the tax payers.
Now, this is the first kicker since 2001. In the years following 2001 we had massive budget shortfalls and as a result state funding was cut for every program across the board. (Even prompting the voter in Multnomah county to vote themselves their own income tax to make up for lost money.) It sure would have been nice to have a little cash set aside to make up for the shortfall.
Yet somehow here we are 5 years later and getting another kicker. I'm glad we've learned our lesson.
Count your blessings. In Massachusetts most surpluses end up in the rainy day fund. I think we had $2 billion in it at one time. Sometimes the legislature decides to spend some of it. This past spring it was $450 million that was used to pay bills.
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I would think a rainy day fund would be exactly what should be done with it.
Hear, hear.
The problem with it is that who are we to trust as to what qualifies as a "rainy day"...when the set-aside fund can be used?
From my experience, state legislators have real dubious ideas of what qualifies as an "emergency". State-wide office holders (the goob, and those like him) aren't much better.
Specially since they were supposed to fund some " fund" for educational shortfalls.
I think we should change it to "snow day fund" as it rains too much here for it to make sense.
Snow we freak out about.
Interesting. Zehava mentioned getting a kicker check in another thread and I didn't know what that meant. Now I do! Apparently I've never lived in a state that gives kickers. Anyone want to kick me $500 or so just for grins?
Oklahoma had a small surplus last year and probably will this year as well despite adjusting the state income tax downward to compensate for the difference each of the last two years. The surplus goes in the state's rainy day fund, which currently has an accumulated balance of $496.7 million.
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Oklahoma had a small surplus last year and probably will this year as well despite adjusting the state income tax downward to compensate for the difference each of the last two years. The surplus goes in the state's rainy day fund, which currently has an accumulated balance of $496.7 million.
Y'know, that sounds like a lot, but it needs some scale to bring it into scope.
Do you know, or can you find the state's annual budget last year?
It sounds as though the surplus is growing by increments each year. Do you know, or can you find out, what amount has been added to the rainy day fund each of the past two years?
Do you know who gets to determine what qualifies as a "rainy day" which would allow someone (who?) to tap those rainy day funds? If that's already out there, what is needed to qualify for rainy day funds?
I think I might prefer that each legislature session decide in advance which project, or set of prioritized projects, would receive any surplus revenues. Like here in Oregon, we could use some focused funding on bridge maintenance and repair. You see, when government budgets go wanting, and they are slashed, the first thing to go is capital maintenance. We've been minimizing upkeep of public infrastructure for more than fifteen years now, thanks to tax revolts and dumbass public decisions about revenue use. Public structures of most types are under increasing strain.
And we're getting money back that we already paid in? (I got $500+ back.)
That sounds like fiduciary irresponsibility to me.
It's some dumbass libertard's idea of financial management. Naturally when both costs and revenues fluctuate unpredictably, you never want to have a budgetary cushion or contingency fund!
It's ever so tempting to draw a link between the popularity of such policies and the disastrous personal finances of many citizens...
I would think a rainy day fund would be exactly what should be done with it.
Indeed. Why should a govt be run any different from a business or a family?
Every business and family needs to have cash reserves; ordinary folks can't tax or print money. Why shouldn't the govt also have a reserve, so it can avoid the need to tax or increase the money supply?
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I would think a rainy day fund would be exactly what should be done with it.
Indeed. Why should a govt be run any different from a business or a family?
I know! I know! It's because governments usually deal with providing services which the private sector cannot, or will not, usually because it is not profitable.
Quote:
Every business and family needs to have cash reserves; ordinary folks can't tax or print money. Why shouldn't the govt also have a reserve, so it can avoid the need to tax or increase the money supply?
I agree that government should, if possible, have reserves, but not for the reason you cite. It should be to maintain services which the public desires, but the current revenues at a later date cannot support, usually due to reduced revenues arising from less economic activity in the taxing district. Rather than expanding and contracting with the economy, a baseline of services provided by government should be established, and a reserve established to maintain those services over several years with reduced tax collections.
Indeed, Keynesian economics would recommend deficit spending in the event of depressed economic activity in the private sector. (Most public sector taxing authorities have accepted this.) The caveat is that Keynesian economic theory recommends that once the economy was once again booming, that some of the increased revenues from increased income from increased economic activity, should go toward paying down the debt that was incurred in times of economic stagnation or contraction. (This is something which the US government has yet to master...having found a great new source of a lot of revenue, the military/industrial complex continued to create international crises to keep massive amounts of "defense" spending flowing into their private sector pockets, preventing the debt from being paid down).
Please note that of the types of taxes which support government, consumption, income and wealth, both consumption (aka sales) taxes and income taxes decline in times of economic stagnation and depression. Wealth taxes, of which property taxes are the most familiar, widespread, and touch the largest variety of wealth tax payers, do not, or decline with the decline in value of whatever property is taxed. The problem, of course, with wealth taxes is that they usually fall far more heavily upon the small property owners...particularly those with fixed incomes, the elderly and disabled.
My recommendation, not surprisingly, is that governments should maintain reserves, debts should be repaid during flush times, and the owners of larger reserves of wealth should be taxed more. I specifically recommend a progressive inheritance tax which increases steeply as the taxed estate increases in value. I think that even allowing for maintenance of the lifestyle of the widowed, education and nestegg for offspring of the benefactor, and gifts to bone fide nonprofits (not familial trust funds), should increase the coffers and return more money to the economy.
Of course, reigning in the profligate spending, and accompanying taxing, of the federal government needs to be curtailed and returned to the states, rather than continuing the whole filling of pork barrels in Washington so privileged legislators can bring them home for their districts.
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Last edited by godfry n. glad; 12-11-2007 at 07:39 PM.
I am happy about the progressive income tax as opposed to sales taxes.
Goofy as my state can be, that's working out well.
As am I. Sales taxes, or any consumption tax, is regressive, and makes the lower income levels of the economy carry the cost of government services. The very same government services which the wealthy use at much greater levels than either middle or lower income taxpayers.
The best tax structure for a state, from my view, would utilize all three forms of taxation, with progressive income taxes providing the bulk of revenues. I would prefer that all real property taxes be collected for local government services (schools, sewer, water, police, fire, streets) with equalization using income taxes collected by the state. The existant sales taxes on alcohol, tobacco, gambling, jewelry, and hospitality should stand (Oregon does have sales taxes on all these items, just not a general sales tax, like Washington), and a sales tax on cannabis should be added. As noted, progressive inheritance taxes with steeper rates should be implemented. With a "prudent reserve", such a "three-legged" tax system should be able to maintain a relatively stable provision of needed public services.
One thing which has occurred in Oregon since the voters revolted and limited property taxes by limiting increases in valuation to a maximum of 3% per year is that local governments have responded by implementing a vast array of "user fees" like increases in permit charges and increases in the cost of sewer and water provision, along with cutting budgets to the bone (consequence: statewide schools dropped from the top ten twenty years ago to 49th in recent years - only Mississippi was deemed in worse shape), which has resulted in neglected and degrading infrastructure through deferred maintenance.
Those Crazy Cascadians
I'm glad we've learned our lesson. 
fund" for educational shortfalls. 
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