MA: Regional Budget (In the works)

[🐒Gods of Prosperity🔱🐲💸]

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.

hopefully we will be able to use the stimulus funds at our disposal directly toward balancing this year's budget.  we will be cutting spending too, but we wont know how much until we see just how big this deficit actually is.

[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

[The Artist Formerly Known As and Now Again Known As Ogis]

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.

Also, if you have any specific qualms with the budget, we would be glad to bring up debate about it.

[Badger]

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.

What I'm suggesting is doing both. Include the amount given in the stimulus for spending totals, but note its source and (correctly noted, Shua) presumably temporary basis.

BTW: Sorry I didn't get the last final touches of figuring out "other" tax revenue (estate, excise, gaming, miscellaneous) before leaving on vacation. This has litterally been the last thing needed on the budget before turning it over to you folks to play with for about 3 weeks now.

I'll try to get on it soon, but this is a busy week. Anyone willing to calculate the stimulus spending into the proposed budget would really help here.

EDIT: Oh! I see that's being done. Thanks!

[Badger]

OK. I should have a final posting of my budget analysis later tonight. Here's some preview:

Sit down.

The remaining "other" taxes didn't really have much difference between Gov. A-Bob's proposal and real life, but only because the areas of taxation I hadn't "graded" to real world standards yet--captial gains, and excise taxes--actually come under the categories from the website I've been using to base this on of income taxes and "ad valorum" (i.e. sales) taxes.

Here's a comparison to RL tax rates and the proposed budget:

Capital Gains: 0%. This is obviously MUCH lower than other states. Only 9 states in RL have no state capital gains tax (and the same states generally have no income tax either).
http://www.usgovernmentrevenue.com/united_states_total_revenue_pie_chart#usgs30210
None of these states are in the Mideast. the average RL capital gains rate in Mideast states I estimated to be about 4.8%. That is obviously going to create an even bigger hit to income tax revenues which the GM's Office previously estimated was already on track to produce 50% less revenue than RL states due to very low proposed tax rates.

Excise taxes: Alcohol and Tobacco. The proposed alcohol taxes are about the same as real life rates. Maybe a tinsy bit lower, but I'll give it a pass and say it evens out. Unfortunately the proposed $0.70/pack cigarette tax is about 1/2 to 1/3 the rate of most real life states that set $1.50 to $2/pack taxes. Worse yet, the share of excise taxes collected from tobacco in real life state is 3 to 10 times the amount collected from alcohol taxes; consequently the low proposed cigarette taxes will have a much heavier ding to excise revenue than the "average" alcohol taxes proposed can make up for.

Fuel taxes. The proposed 1.5 cents per gallon is MUCH lower than RL states in the Mideast which assess taxes generally in the upper teens cents per gallon. This proposed rate will cut overall fuel tax revenue by over 90%.

The combined reduction of tobacco taxes by 1/3 to 1/2 and gasoline taxes to less than a tenth of their respective RL levels I estimate will cut overall ad valorum tax revenue by just over 10%. If that doesn't sound like much consider that category includes all sales taxes, and is the region's largest source of income (RL: $92 Bil).

The total numbers coming soon. Brace yourselves for a crisis.......

[Badger]

MIDEAST REGIONAL BUDGET: FY 2011 (Proposed)

SPENDING

                                   Mideast                        RL

Pensions:                   $10.05 B                  $42.7 B

Health Care:              $58.85 B                  $99.7 B

Education:                 $35.12 B                  $67.9 B

Welfare:                    $31.39 B                  $36.5 B

Protection:                $12.45 B                  $19.2 B

Transportation:         $14.72 B                  $25.8 B

Other:                       $33.8 B                    $35.0 B


TOTAL:                  $196.4 B                  $325.8 B


REVENUE:

                                              Mideast                       RL

Income Taxes:                       $29.3 Bil                   $62.8 Bil

Social Insurance Taxes:         $24.4 Bil                   $24.4 Bil

"Ad Valorum" Taxes:              $82.6 Bil                   $92.0 Bil
(i.e. sales, excise, fuel, etc.)

Fees:                                      $43.0 Bil                   $43.0 Bil

Business and Other:              $62.4 Bil                   $57.8 Bil

TOTAL:                                    $241.7 Bil               $290.0 Bil


Several notes: First, the individual RL numbers may not add up exactly; they didn't on the website either, but I used the overall totals so these should be sound. Also the website updated its numbers for FY 2010 that I based these numbers on after I originally wrote them down weeks ago and I may not have caught all the updates in individual categories. Feel free to double check my math, especially if it helps you scrounge some extra bucks.

Secondly. the Business and Other revenue is higher due to legalized gambling being widely available in the region unlike in RL. I may've exaggerated its effects (this year at least), but I figure you guys could use the help.

Third, this does NOT factor in federal stimulus money. Be my guest to modify the post once you decide how/where to spend it.

Finally, just to reiterate that while most spending decisions are free to choose, from socialist utopia to libertarian brave new world, the region MUST increase its spending on pensions to equal RL levels. The Mideast region is contractually bound and short of declaring regional bankruptcy must abide by those numbers or face lawsuits--which it will lose. Otherwise, have fun and get creative!

Oh, and good luck.

[🐒Gods of Prosperity🔱🐲💸]

From those figures it looks like revenue exceeds spending by 45 B, so  we could raise pensions to RL levels and still be in the black - Am I missing something?

[Badger]

From those figures it looks like revenue exceeds spending by 45 B, so  we could raise pensions to RL levels and still be in the black - Am I missing something?

How about the 1/3 cuts to transportation/infrastructure and protection/law enforcement, and the nearly 50% cuts to education and health care spending?

You may adopt such draconian cuts if you wish, but just as in RL there would be "ramifications" to say the least (and not just politically, but in actual services cut).

[🐒Gods of Prosperity🔱🐲💸]

Do you have any figures available for RL capital gains and/or fuel tax revenue?

[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.

[🐒Gods of Prosperity🔱🐲💸]

okay, from here it looks like the fuel tax is about 9.1 B for mideast states, so i guess we would raise about 8 B by putting this at RL, right?  to me, a fuel tax makes sense as a source of revenue to help pay for transportation costs.

[Badger]

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.

[Badger]

okay, from here it looks like the fuel tax is about 9.1 B for mideast states, so i guess we would raise about 8 B by putting this at RL, right?  to me, a fuel tax makes sense as a source of revenue to help pay for transportation costs.

That sounds about right. It would require raising fuel taxes to between 16-19 cents per gallon. Good use of the website, btw.

EDIT: FYI I calculated that the current 1.5 cents/gallon tax would produce about 10% of RL revenues (actually should've been a bit under 10%, but I was being generous ). If you simply added up the total fuel tax revenue for RL states and came up with $9.1 Billion, the increase under "Ad Valorum" revenue by increasing Mideast fuel taxes to the RL levels of 16-18 cents/gallon would be only about 8.2 Billion, as I already included about 0.9 Billion from the tiny 1.5 cents/gallon tax proposed.

(Takes of GM hat): My two cents, why not also jack up cigarette taxes to $2/pack? I know cigarette taxes are what everyone goes to first and eventually one will hit diminishing returns and/or a growing black market, but why not keep such taxes at least consistent with RL levels of $1.50-$2/pack before even thinking about cutting road maintenance, police and prison protection, etc?

[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

[Badger]

So any proposals for dealing with this short of closing down a third of prison cells and state police posts, and closing half the hospitals and nursing homes and schools as well?

No it wouldn't be THAT bad, as the funding these places rely on generally isn't all from the state (er, "regional") level. Still, it would be "dramatic" to say the very least.

[Badger]

Hey All:

Since I assume this isn't the budget proposal you ultimately want to pass (Shua's already suggested some changes to excise taxes), I'm considering a date of, say, Tax Day (4/18 this year) for when the budget goes into effect.

Let me be clear, since A-Bob's budget proposal near the beginning of this thread was, after all, only a proposal, I am going to assume unless the Assembly and Gov act otherwise, the budget going into effect (or rather, continuing in effect) on 4/18 will be the same as RL FY 2011, both in terms of spending and tax levels. Please note even that RL budget includes a $35 Bil deficit (spending levels being about 112% of revenue). However please note I assume unless someone shows me Mideastern law to the contrary that deficit spending is legal and permitted (with the usual RL economic ramifications).

Also note I am open to a different deadline date if the regional consensus wants it changed. Lord knows it took me long enough to get the figure for the budget together. I just want to encourage the Assembly and Gov to take action and play with this new toy I made for you.

Likewise, there's nothing stopping the government from approving stopgap funding measures if there is no resolution by 4/18/11. Shades of real life, no?

[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.

[Badger]

Well, obviously any proposal needs to be passed by the Assembly. Feel free to use this thread or the ME Assembly Thread to introduce it as separate bill. Gov's and Speaker's decision, though come to think of it the latter (introduced as a separate bill) would probably work best, IMHO, so there is an actual concrete proposal for the Assembly to address and (presumably) amend.

Beyond that, please advise if the 4/18/11 deadline, which the government may extend with ad hoc temporary spending extension resolutions, is OK. If you want a later date before even having to consider such temporary spending extensions if there's no resolution by then, please advise ASAP.

[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?

[Queen Mum Inks.LWC]

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

[Badger]

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

Not necessarily. That's fine, but I say let anyone in the government who wants to propose a budget and let a thousand flowers bloom the haggling begin.

[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)

[🐒Gods of Prosperity🔱🐲💸]

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.

[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