Posted on 05/30/2002 4:54:18 AM PDT by GailA
Edited on 05/07/2004 9:20:02 PM PDT by Jim Robinson. [history]
Steve or Phil or maybe even Tim himself said something about him being a 70% liberal. But for the Tennessean's purposes he is the token conservative. Compared to Larry Daughtrey, he is almost conservative.
One of the 17 pro income taxers called in to Phil's show a while ago and complimented the anti-income tax protestors. He said that he had several reasonable disucussions and the media is wrong in their portrayal of us as a "riotous mob."
You will find that finances of the State are no where near as dire as being suggested by legislators, because most don't realize how the States are mandated to keep what are essentially two sets of books, The Budget, and the CAFR, which keeps account of ALL assets and liabilities.
Anyone with a financial background will see that the States are in much better financial condition than publically stated.
Keep in mind that this CAFR is only for the State itself, NOT all of the agencies and corporate entities within the State such as Ports Authority, school systems, counties and cities, they all have separate CAFR's!
A good site to check out is: http://www.cafrman.com/
Tennessee Has At Least $4.74 Billion In Potential Surpluses of the Taxpayers Money.
By the CAFR Network
Introduction
A recent article in the Wall Street Journal stated:
"...Meanwhile, state budget analysts estimate Tennessee faces a $350 million shortfall in the current fiscal year ending June 30, and a gap that could potentially approach $800 million in the next fiscal year... Even if a tax increase can be avoided, the candidates are bracing for a volatile first term in office because deep cuts in state spending seem inevitable..."
This report demonstrates that the State of Tennessee at the State-level has approximately $4.74 billion of the taxpayer's money it is not using, i. e. potential surpluses equal to $792 for every man, women and child in Tennessee or $3,169 for a family of 4. This does not include all the additional potential surpluses that exist in the school districts, cities, or counties in Tennessee.
So how can the State have a budget shortfall?
Simultaneous Budget Deficits/Shortfalls and Financial Surpluses
This is the most deceiving topic that governments, politicians, and the news media have conveyed to the public about governmental financial matters. In realty, a government can simultaneously have a budget shortfall and a financial surplus of the taxpayers' money.
A budget is an estimate of the amount of money to be received and the amounts to be spent for various purposes in a given time. It is a planning and monitoring document. It matches revenues (income) and expenditures (expenses) for a given period of time which is usually one year for most governments. It does NOT demonstrate the financial condition of a government.
You continually hear the phrase "budget shortfall" or "budget deficit." What this means is that projected (planned) expenditures will probably exceed projected (planned) revenues. When this happens, governments immediately want to raise taxes and/or reduce services regardless of the financial condition of the government. It works every time.
A Simple Example to Understand the Surplus Problem.
Let's take a moment to understand the half-truth that the public is told.
Let's assume a government has $1 million in cash and investments at the end of the fiscal year. When the government prepares its budget it is not required to include that $1 million in the the budget process because that $1 million is considered an asset and not revenue. The income (interest and/or dividends) received from the $1 million cash and investments are included as revenues in the budget process.
Next, if the budget process discloses that expenditures are probably going to exceed revenues (including the income generated from the $1 million in cash and investments) by $100,000, then the government, politicians, and news media say that the government has a "budget shortfall" or 'budget deficit". Next step is to raise taxes or cut services by $100,000.
But I say hold on a minute. If governments are non-profit organizations that operate mostly on a pay-as-you-go system, then why is there $1 million in cash and investments being held. Also, why not use $100,000 of the $1 million in cash and investments to makeup for the budget shortfall.
The fact that the government has not used the $1 million at the end of the year means it is excess to the operation of the government.
The excess of $1 million will not be included in the next budget, only the income from that $1 million.
The $1 million is surplus and should either be considered in the next years budget process, which would result in huge tax reductions, and/or returned to the people as rebates.
The State should implement the CAFR Budget System to prevent surpluses from accumulating in the future.
The $1 million in cash and investments are not shown in the budget. These assets are included in a publicly available document called the Comprehensive Annual Financial Report (CAFR) . This report concerns itself solely with the CAFR.
Unfortunately, the media generally doesn't want to report this because, it is embarrassing to the powers that be...
I would hope that Freepers throughout the country would look at the CAFR issue in their localities. Every legal unit of any government, has its own CAFR, in addition to its "budget". A thorough reading of the annual financial reports will wake-up a lot of people! Estimates are that currently, all government operations in the country have combined assets of over 60 trillion dollars! So therefore, in many cases, taxes are optional!
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