MA: Regional Budget (In the works)

[California8429]

Thank you for the report.

I'm going to hold off on deciding to raise the taxes or what to cut in the budget until we get that spending report and have all our total tax revenue added together to see the overall deficit (most likely).

[California8429]

So if we kept this unrealistic numbers, we'd be fine on spending, however with the necessary even minimal budget increases in areas, we'd be short correct.

[California8429]

Well I'm in favor of a balanced budget so we don't screw ourselves in the long run (Especially since the tax credits now have no effect this first time).

The final budget should be smaller than RL. I know we have some breathing room with the stimulus for health care as well as transportation.

Obviously to make sure we don't have significant cuts, we're going to need to bring the income tax levels much closer to RL.

How much are corporate taxes going to bring in for revenue (we still have the ability to create higher brackets for those making hundreds of millions of dollars, I mean even a 0.5% increase will generate a decent amount)

[California8429]

This is a quote from my re-election thread where A-Bob asked about ideas for balancing the budget. I'm no expert on what's expected where, but there were things that I had questions on or believed un-necessary.

What specific cuts would you make in the budget and/or tax increases to make up for our projected budget shortfall?

I decided to go over the budget and see what was going on. I came up with two categories for the things I wrote down: "What is this?", and "What is oure role in this?" I'd appreciate an amount of explanation for category one, and an a reason why we're funding category two.

What is this?
Updating Energy Infrastructure
I'm wondering what that means and how it translates into action.

What is oure role in this?
Mental health and substance abuse (Is the reason we're paying for this crime control, or general humanitarianism?)
Agricultural research (It's probably normal for a government to fund research, but why?)
Crop Insurance (Are there private agencies for this? Do people pay, or do they get it for free?)
Fund for alternative energy (Again, I know most government fund this, but why? I'd at least consider leaving it up to private enterprise to research)
Vocational Education (Is this like trade school? I can understand K-12, but please explain this)

I'd like these questions answered.

Everthing related to energy is best answered by Governor tmth as he's the one pushing for a large economy economy. For mental health and abuse, that helps overall with not just criminals, but potential would be dangerous people, it would help reform criminals as well as stop certain people from continuing a destructive path. Governments have always given out grants for research, agriculture as well in order to improve effiency, reduce costs, and create healthier crops. With alternative energy research, again, government's give out grants to those that can show promising results.

[California8429]

To clear this all up for all the tax credits I wrote (no change) for all of them because I was thinking it would be based off of the first budget, therefore it would be impossible for a change of added or subracted dollars. I only could guess on the tax credits necessary for positive economic growth based off of the national tax credits but for 1/4 of the nation. Is this making sense?

Anyways I would just like to clear that up. Ask me if this still doesn't make sense.

Thanks

[California8429]

Yes, in reality the numbers I proposed were complete guestimations to start off the debate. Though if we left them at current levels, those tax credits and deductions would be a lot more than RL, which would in turn boost our economy.

[California8429]

Yes, in reality the numbers I proposed were complete guestimations to start off the debate. Though if we left them at current levels, those tax credits and deductions would be a lot more than RL, which would in turn boost our economy.

The problem is I'm not sure we have the funds to allow those tax credits - because your tax credits have to be much lower than what your tax revenue would be without them - otherwise you wont have any money to fund the government.  My understanding is that Badger made his revenue calculation based on RL state tax deduction policy. So I believe we should be starting from RL in terms of what deductions to get rid of, not to add to, given our potential deficit. Some credits may be helpful to economic growth, but most are not worth higher deficits or higher overall tax rates.

The problem is to calculate the RL tax credits in all these areas for multiple states. Would you be able to do it Badger?

[California8429]

Yes, in reality the numbers I proposed were complete guestimations to start off the debate. Though if we left them at current levels, those tax credits and deductions would be a lot more than RL, which would in turn boost our economy.

The problem is I'm not sure we have the funds to allow those tax credits - because your tax credits have to be much lower than what your tax revenue would be without them - otherwise you wont have any money to fund the government.  My understanding is that Badger made his revenue calculation based on RL state tax deduction policy. So I believe we should be starting from RL in terms of what deductions to get rid of, not to add to, given our potential deficit. Some credits may be helpful to economic growth, but most are not worth higher deficits or higher overall tax rates.

The problem is to calculate the RL tax credits in all these areas for multiple states. Would you be able to do it Badger?

No.

Seriously though: I would ask you to assume all such taxs deductions exist to the same degree "as in real life". Yes, that varies from state to state. However, if you don't have a strong position (or even familiarity) on the current tax deductability levels, then there's noo reason to change those deduciton levels, is there?

Present me any homework with a cite for your source and I'll gladly do analysis from there.

But that's the problem, how can we change the deduction numbers or not change them from a number we don't have?

[California8429]

Badger, what exactly is it that you need?

Not much. Revelation time: I've been delaying over some PM's exchanged with Muon to determine if the sources and numbers I've been using are fairly realistic. (Who better to ask than an actual IL state legislator?) Nevertheless, I want to get this done before I leave on vacation this weekend. So if someone can add the federal stimulus money to the correct categories of regional expenditures (transportation, etc.), then I will finally get around to figuing out the revenue from proposed excise, estate, and other taxes.

Then you'll have a complete proposed budget with what I preliminarily calculate will be a MASSIVE deficit. Then it'll be up to you guys to figure out what to do about it.

Can't we just wait to add the stimulus funds at the end to help make up for the deficit?

[California8429]

I'm a bit concerned about just adding the stimulus dollars into the figures for the general budget.

That means that when the stimulus money runs out, we have to find a new source of revenue and start from scratch on the budget, right? I think it's better to keep it as a separate add on to a baseline spending amount.

The other option would be to raise more taxes right now

[California8429]

so here's what what was in the federal stimulus for the mideast region, right?

a. Mideast ($20 billion) 
    1. $10 billion for Health Care, including repair/building of health facilities, child health care deductions, and other various needs.
    2. $1 billion for tax credits on green cars.
    3. $5 billion for rural infrastructure.
    4. $3.9 billion to be put at the direct disposal of the Mideast Regional Government.
    5. $100 million for sexual education classes in the region.

how much is funding for current programs, and how much is for new/temporary programs?

I was only talking about the 3.9 billion given to our disposal, if that clears things up

[California8429]

so here's what what was in the federal stimulus for the mideast region, right?

a. Mideast ($20 billion) 
    1. $10 billion for Health Care, including repair/building of health facilities, child health care deductions, and other various needs.
    2. $1 billion for tax credits on green cars.
    3. $5 billion for rural infrastructure.
    4. $3.9 billion to be put at the direct disposal of the Mideast Regional Government.
    5. $100 million for sexual education classes in the region.

how much is funding for current programs, and how much is for new/temporary programs?

I was only talking about the 3.9 billion given to our disposal, if that clears things up

are the rest federal programs? or do we need to budget it?

The rest I was just considering to be extra federal programs on top of our budget. Though if we absolitely had to do balance a budget, we could cut a few billion from health care and be saved this first budget

[California8429]

Wouldn't it be best to balence the budget, not raise taxes and send some of the stimulus back to the Feds? The better thing to do would be to cut spending.

we've actually cut the budget a huge amount. the estimate PS provided as GM was 500-600 billion. Our budget as you can see is hundreds of billions less than that

[California8429]

Wow, our business taxes are above RL?

Well I think there's room for cuts in all areas (minus pensions which can be constant) in return for this drastic reduction in the income tax (though obviously a 50% cut in education and such isn't a fair trade).

We were given like 10 billion? for Health Care, so keep that in mind everyone for what we want to raise by how much.

[California8429]

Wow, our business taxes are above RL?

No, no. The "Business" in the "Business and Other" category is revenue generated by state owned enterprises like state liquor stores, etc. Its higher than real life because: a) the proposed budget doesn't change anything in this regard and; b) legalized gambling is more widespread in the Mideast than RL, and thus generates more revenue. I suppose I could've added the additional revenue under the "Ad Valorum" category, but tomato, tomahto, its the same amount of revenue regardless.

In fact the proposed business taxes are much lower than in RL.

Thanks for clearing that up

[California8429]

Since we have a 45 billion surplus, how about we start updating this budget by fixing the pension spending at RL levels and go from there, since that's one of those things that really can't just be cut drastically.

I think the last area we should put more money in is Health Care. Currently our income tax levels are really half that of RL and we're getting 10 billion from the stimulus for health care regional activities.

I'm also fine with increasing the cigarette tax in order to increase funding for transportation and protection as well as a gasoline tax if we can reduce regulations for the energy industry which would balance the tradeoff for drivers, bring us more revenue, and give the people more jobs. Any of you older guys know of energy legislation that has been written? My first session we passed an algae bill.

[California8429]

Well I don't think we really need to propose an amendment, since truly, we haven't officially proposed a budget, this is just a draft correct?

[California8429]

Here's an updated version of spending. Protection, Pension, Education, transportation all pretty much meets up with RL spending. Health Care is only at 60 billion plus 10 from the stimulus giving us 70 when RL if 99. However there is significant funding going to poor families, and adequate pension for retired people and also large tax cuts for health care for those in the private sector.



Spending ($279.26 billion)

Energy ($5.85  billion)
$3 Billion ...... Loans to be granted to energy companies that have a responsible environmental track record, are seriously attempting to develop clean energy alternatives, push for energy efficiency and/or have an approved plan to do so.
$1 Billion  ...... Fund for alternative energy
$1 Billion  ...... Updating the Mideast's current energy infrastructure
$0.5 Billion  ...... Refitting all government buildings to run on clean energy
$0.25 Billion  ...... Refitting all government vehicles (cars, planes, etc.) to run on clean energy)

Natural resources and environment ($5.21 billion)
$2.61 billion ...... Water resources (No Change)
$0.57 billion ...... Conservation and land management (No Change)
$0.42 billion ...... Recreational & Park resources (No Change)
$1.11 billion ...... Pollution control and abatement (No Change)
$0.5 billion ....... Other natural resources (No Change)

Agriculture ($4.04 billion)
$2.95 billion ..... Farm income stabilization & crop insurance (No Change)
$1.09 billion ...... Agricultural research and services (No Change)

Commerce and Housing Loan Programs ($1.95 billion)
$0.34 billion ..... Housing Loan Programs (No Change)
$0.02 billion ..... Deposit insurance (No Change)
$1.36 billion ...... Universal service fund (No Change)
$0.23 billion ...... Other advancement of commerce (No Change)

Transportation ($23.25 billion)
$9.00 billion ..... Highways and highway safety (No Change)
$4.00 billion ...... Mass transit (No Change)
$0.25 billion ...... Railroads (No Change)
$2.05 billion ..... Air Transportation (No Change)
$1.05 billion ...... Water transportation (No Change)
$0.45 billion ...... Other transportation (No Change)
$6.45 billion ..... Non-Highway Roads (No Change)
Community and regional development ($4.39 billion)
$2.50 billion ...... Community development (No Change)
$0.96 billion ...... Area and regional development (No Change)
$0.93 billion ...... Disaster relief and insurance (No Change)

Education ($68.00 billion)
$40.00 billion ..... Elementary, Secondary & Vocational education (No Change)
$20.00 billion ..... Higher education (No Change)
$8.00 billion ...... Research and general education (No Change)

Training, labor and unemployment ($9.37 billion)
$4.34 billion ...... Training and employment (No Change)
$0.2 billion ....... Labor law, statistics, and other administration (No Change)
$4.83 billion ..... Unemployment compensation (No Change)

Health Spending ($60.85 billion)
$37.87 billion .... Medicaid grants (No Change)
$1.03 billion ...... State Children's Health Insurance (No Change)
$0.59 billion ...... Indian health (No Change)
$1.01 billion ...... Substance abuse and mental health services (No Change)
$0.97 billion ....... Disease control, public health and bioterrorism (No Change)
$8.45 billion ..... Health research and training (No Change)
$0.89 billion ...... Food safety and occupational health and safety (No Change)
$2.05 billion ..... Other health care services (No Change)
$7.01 billion ...... Prescription drug benefit (No Change)
$0.98 billion ...... Health care fraud (No Change)

Civilian Retirement ($41.50 billion)
$1.0 billion ...... Civilian retirement and disability insurance (No Change)
$29.50 billion ..... Mideast employee retirement and disability (No Change)
$11.00 billion ...... Mideast employees' and retired employees' health benefits (No Change)

Aid to Low-Income Families ($26.00 billion)
$6.01 billion ..... Housing assistance (No Change)
$4.33 billion ..... Food stamps (No Change)
$2.3 billion ...... Other nutrition programs (WIC, school lunches) (No Change)
$3.33 billion ..... Family support payments (TANF) (No Change)
$7.01 billion ..... Earned Income Tax Credit (EITC) (No Change)
$1.85 billion ..... Child tax credit (No Change)
$0.99 billion ....... Child care funds (No Change)
$0.18 billion ...... Other aid to low-income families (No Change)

General Family Support ($5.39 billion)
$1.32 billion ...... Foster care and adoption assistance (No Change)
$0.33 billion ...... Child support and family support programs (No Change)
$3.74 billion ..... Social and family services (No Change)

Administration of justice ($20.45 billion)
$11.35 billion ..... Regional law enforcement and security (No Change)
$5.21 billion ..... Regional litigation and judicial activities (No Change)
$2.89 billion ...... Regional prison system (No Change)
$1.00 billion ...... Criminal justice assistance (No Change)

General government administration ($3.01 billion)
$0.31 billion ...... Legislative functions (No Change)
$0.10 billion ...... Executive office programs (No Change)
$2.05 billion ....... Fiscal operations (No Change)
$0.55 billion ...... Other general government (No Change)

[California8429]

I believe the Medicaid program has been replaced by the Atlasian National Healthcare Act, so I don't think we need to be allocating funds to that.

That would be wonderful if it were true. Can anyone else verify this? (As you can see I'm not as tunned in with older federal laws as I am with the Mideast)

[California8429]

Who wants to propose the budget?  I think this would be a good power to place in the Governor's hands.

We could just make this the silent rule that the Governor shall propose it. If anyone else wants to propose a budget they are welcomed to (usually the opposition if they want some drastic changes) as in RL

[California8429]

Well that's great. So really we'd only have tax credits for the businesses who provide it for their employees (or self employed people) and could save some tens of billions.

I'd assume we wouldn't need prescription drug funds either as that is currently inclunded in RL section D and atlasia's health care took over all of that correct?

[California8429]

Here's my most updated version. I took a lot out from tax cuts, and made sure everything is equal in spending to RL pretty much (minus HC) which was already mainly Medicare and Medicaid money. I've also slightly increased taxes, mostly in excise and a little for the rich in income tax (which is still pretty much in line or lower than RL averages).

*(No change) does NOT denote changing in spending levels from RL to this budget. It's really there for the next budget so we can copy this first budget, change the numbers, and then off to the side put the positive/negative change since the preceeding budget.

Total Budget: $310.61 billion
Spending ($229.41 billion)

Energy ($5.85  billion)
$3 Billion ...... Loans to be granted to energy companies that have a responsible environmental track record, are seriously attempting to develop clean energy alternatives, push for energy efficiency and/or have an approved plan to do so.
$1 Billion  ...... Fund for alternative energy
$1 Billion  ...... Updating the Mideast's current energy infrastructure
$0.5 Billion  ...... Refitting all government buildings to run on clean energy
$0.25 Billion  ...... Refitting all government vehicles (cars, planes, etc.) to run on clean energy)

Natural resources and environment ($5.21 billion)
$2.61 billion ...... Water resources (No Change)
$0.57 billion ...... Conservation and land management (No Change)
$0.42 billion ...... Recreational & Park resources (No Change)
$1.11 billion ...... Pollution control and abatement (No Change)
$0.5 billion ....... Other natural resources (No Change)

Agriculture ($4.04 billion)
$2.95 billion ..... Farm income stabilization & crop insurance (No Change)
$1.09 billion ...... Agricultural research and services (No Change)

Commerce and Housing Loan Programs ($1.95 billion)
$0.34 billion ..... Housing Loan Programs (No Change)
$0.02 billion ..... Deposit insurance (No Change)
$1.36 billion ...... Universal service fund (No Change)
$0.23 billion ...... Other advancement of commerce (No Change)

Transportation ($23.25 billion)
$9.00 billion ..... Highways and highway safety (No Change)
$4.00 billion ...... Mass transit (No Change)
$0.25 billion ...... Railroads (No Change)
$2.05 billion ..... Air Transportation (No Change)
$1.05 billion ...... Water transportation (No Change)
$0.45 billion ...... Other transportation (No Change)
$6.45 billion ..... Non-Highway Roads (No Change)
Community and regional development ($4.39 billion)
$2.50 billion ...... Community development (No Change)
$0.96 billion ...... Area and regional development (No Change)
$0.93 billion ...... Disaster relief and insurance (No Change)

Education ($68.00 billion)
$40.00 billion ..... Elementary, Secondary & Vocational education (No Change)
$20.00 billion ..... Higher education (No Change)
$8.00 billion ...... Research and general education (No Change)

Training, labor and unemployment ($9.37 billion)
$4.34 billion ...... Training and employment (No Change)
$0.2 billion ....... Labor law, statistics, and other administration (No Change)
$4.83 billion ..... Unemployment compensation (No Change)

Health Spending ($12.00 billion)
$1.15 billion ...... Substance abuse and mental health services (No Change)
$0.70 billion ....... Disease control, public health and bioterrorism (No Change)
$8.45 billion ..... Health research and training (No Change)
$1.50 billion ...... Food safety and occupational health and safety (No Change)
$0.20 billion ..... Other health care services (No Change)
$1.00 billion ...... Health care fraud (No Change)

Civilian Retirement ($41.50 billion)
$1.0 billion ...... Civilian retirement and disability insurance (No Change)
$29.50 billion ..... Mideast employee retirement and disability (No Change)
$11.00 billion ...... Mideast employees' and retired employees' health benefits (No Change)

Aid to Low-Income Families ($25.00 billion)
$6.01 billion ..... Housing assistance (No Change)
$4.33 billion ..... Food stamps (No Change)
$2.3 billion ...... Other nutrition programs (WIC, school lunches) (No Change)
$3.33 billion ..... Family support payments (TANF) (No Change)
$7.01 billion ..... Earned Income Tax Credit (EITC) (No Change)
$0.85 billion ..... Child tax credit (No Change)
$0.99 billion ....... Child care funds (No Change)
$0.18 billion ...... Other aid to low-income families (No Change)

General Family Support ($5.39 billion)
$1.32 billion ...... Foster care and adoption assistance (No Change)
$0.33 billion ...... Child support and family support programs (No Change)
$3.74 billion ..... Social and family services (No Change)

Administration of justice ($20.45 billion)
$11.35 billion ..... Regional law enforcement and security (No Change)
$5.21 billion ..... Regional litigation and judicial activities (No Change)
$2.89 billion ...... Regional prison system (No Change)
$1.00 billion ...... Criminal justice assistance (No Change)

General government administration ($3.01 billion)
$0.31 billion ...... Legislative functions (No Change)
$0.10 billion ...... Executive office programs (No Change)
$2.05 billion ....... Fiscal operations (No Change)
$0.55 billion ...... Other general government (No Change)
--------------------------------------------------------------------------------

Tax Expenditures and Tax Cuts ($81.20 billion)

Corporate Tax Breaks ($11.03 billion)
$7.00 billion ...... R&D Tax Breaks (No Change)
$1.01 billion ...... Energy, Mining and Timber Tax Breaks (No Change)
$2.03 billion ...... Tax Free Bonds (No Change)
$0.99 billion ..... Other Corporate Tax Breaks (No Change)

Personal Business & Investment Benefits ($5.09 billion)
$3.80 billion ..... Tax-Free Bonds (No Change)
$0.56 billion ...... Enterprise & Empowerment Zones and New Markets credit (No Change)
$0.33 billion ....... Other personal investment tax breaks (No Change)

Pension & Retirement Deductions ($26.08 billion)
$10.05 billion ..... Employer-paid Pensions (No Change)
$7.05 billion ..... 401Ks & Keogh plans (No Change)
$1.50 billion ...... IRAs (No Change)
$6.62 billion ..... Group and personal life insurance benefits (No Change)
$0.86 billion ...... Other retirement benefits (No Change)

Health Insurance Tax Benefits ($12.64 billion)
$9.80 billion .... Employer-paid Health Insurance (No Change)
$1.03 billion ...... Self-employed medical insurance premiums (No Change)
$1.70 billion ...... Medical Savings/Health Savings Accounts (No Change)
$1.11 billion ...... Deductibility of medical expenses (No Change)

Housing tax benefits ($12.67 billion)
$5.50 billion ..... Mortgage Interest (No Change)
$3.01 billion ..... Deductibility of property taxes on homes (No Change)
$3.51 billion ..... Exclusion of net imputed rental income on owner-occupied homes (No Change)
$0.91 billion ...... Housing bonds & low-income housing investments (No Change)

Other individual deductions and exemptions ($14.43 billion)
$3.62 billion ..... Charitable contributions (No Change)
$1.91 billion ..... Local taxes (w/o home property) (No Change)
$0.56 billion ...... Workmen's compensation (No Change)
$3.33 billion ..... Education deductions and credits (No Change)
$1.31 billion ..... Child credit (No Change)
$1.38 billion ...... Child care credits and deductions (No Change)
$0.46 billion ......... Deduction for the blind and elderly (No Change)
$0.41 billion ...... Employee parking and transit expenses (No Change)
$0.35 billion ...... Adoption and foster care tax credits (No Change)
$0.80 billion ...... Earned Income Tax Credit (EITC)- revenue loss component (No Change)
$0.30 billion ...... Other fringe benefits (No Change)
----------

Income Tax Rate:
0%    $0 - $13,000
1%    $13,001 - $40,000
1.5%    $40,001 - $100,000
2%    $100,001 - $180,000
2.5%    $180,001 - $300,000
3.20%    $300,001 - $750,000
4%    $750,001 - $2,750,000
5%    $2,750,001- $9,999,999
6.5%   $10,000,000+

Corporate Tax Rate:
0%    $0 - $50,000
0.5%    $50,001 - $75,000
1%    $75,001 - $125,000
1.5%    $125,001 - $350,000
2%    $350,001 - $1,000,000
2.5%    $1,000,001 - $10,000,000
3.25%    $10,000,001 - $20,000,000
4%    $20,000,001-$70,000,000
5%   $70,000,001+

Sales Tax Rate: 5.7% (Groceries, prescription drugs exempt)

Excise Taxes:

Gas: 1.5 cents/gallon (2 cents/gallon for diesel).

Cigarettes: $1.60 per pack.
Other Tobacco Products: 55% Manufactures Price
Distilled Spirits: $2.70 per gallon
Wine: $0.30 per gallon
Beer: $0.20 per gallon

[California8429]

Since no one is commenting do you just want me to propose this budget? Note that if there's minor tweeking it will take a lot less time for me to do it now then having to go through a full amendment.

[California8429]

How about this for revenue
----

Income Tax Rate:
0%    $0 - $13,000
1%    $13,001 - $40,000
1.5%    $40,001 - $100,000
2.2%    $100,001 - $180,000
2.7%    $180,001 - $300,000
3.25%    $300,001 - $750,000
4%    $750,001 - $2,750,000
5%    $2,750,001- $9,999,999
6.5%   $10,000,000+

Corporate Tax Rate:
0%    $0 - $50,000
0.5%    $50,001 - $75,000
1%    $75,001 - $125,000
1.5%    $125,001 - $350,000
2%    $350,001 - $1,000,000
2.5%    $1,000,001 - $10,000,000
3.25%    $10,000,001 - $20,000,000
4%    $20,000,001-$70,000,000
5%   $70,000,001+

Sales Tax Rate: 5.7% (Groceries, prescription drugs exempt)

Excise Taxes:
Gas: 7 cents/gallon (10 cents/gallon for diesel).
Cigarettes: $1.60 per pack.
Other Tobacco Products: 55% Manufactures Price
Distilled Spirits: $2.70 per gallon
Wine: $0.30 per gallon
Beer: $0.20 per gallon
Marijuana: $3.00/gram if owner possesses less than 28 grams
$4.50/gram if owner possesses 28 grams or more

[California8429]

I'm baaack!!!!

What do you guys need?

You can help MB with the slight tweak in tax numbers. After that we should be ready to finally pass this.