IDS Budget and Tax Committee

[Yelnoc]

     5.8% should be fine, unless we want to change that as well.

     The corporate income tax is problematic insofar as it makes us uncompetitive when regions like the Mideast have graduated rates that max out at 5%. If we lowered the corporate income tax rate to 5.8%, it would simplify the budget process & help the region's economy.

Sure.  We'll have to go through the legislature I suppose.  Should the bill set both income taxes at 5.8% or just corporate?

     Income taxes are already 5.8%, so that's not a problem.

Oh, right.  I misread that.  I'll go ahead and introduce a bill.

[Badger]

     5.8% should be fine, unless we want to change that as well.

     The corporate income tax is problematic insofar as it makes us uncompetitive when regions like the Mideast have graduated rates that max out at 5%. If we lowered the corporate income tax rate to 5.8%, it would simplify the budget process & help the region's economy.

Sure.  We'll have to go through the legislature I suppose.  Should the bill set both income taxes at 5.8% or just corporate?

The Mideast "budget" is just a proposal. I would wait until the Mideast actually assesses what their final budget is before worrying too much about "competativeness". GM's assessment to follow there.

[Associate Justice PiT]

     5.8% should be fine, unless we want to change that as well.

     The corporate income tax is problematic insofar as it makes us uncompetitive when regions like the Mideast have graduated rates that max out at 5%. If we lowered the corporate income tax rate to 5.8%, it would simplify the budget process & help the region's economy.

Sure.  We'll have to go through the legislature I suppose.  Should the bill set both income taxes at 5.8% or just corporate?

The Mideast "budget" is just a proposal. I would wait until the Mideast actually assesses what their final budget is before worrying too much about "competativeness". GM's assessment to follow there.

     It'll probably take us a little while to get to actually voting on the proposed change anyway. We've been talking about the possibility of reinstituting the death penalty, which has caused the Legislature to fall into disarray. End of the school year doesn't help.

[Yelnoc]

In the meantime, we can work on this.

-Property Taxes/Tax-Property/Southeast Nuclear Energy Initiative, Chapter 4

The relevant section is bolded.

You must be logged in to read this quote.

[Associate Justice PiT]

     As we found out earlier, 270 billion kWh is produced in the region each year. That is equivalent to 8600 kWh/s, assuming continuous production, which is something of a stretch of course. That is equivalent to about 31000 MW of generating capacity, for a maximum property valuation of $1,550,000,000 for the region's 35 nuclear plants.
 
     At that point you'd need to find the property tax rate & the real property value of these plants & calculate the differential. I suspect the real property value will not be easy to find, though.

[Yelnoc]

How about we just assume that the maximum is the actual?  Most likely, the real property values of these nuclear plants are locked away in some real life county office.

Property taxes tend to be a county-level affair.  Since our goal is to combine the state and regional governments, do you think we could just ignore this initiative, considering it does not impact revenue in real terms?

[Associate Justice PiT]

     I think you're right. It seems like this initiative would only impact revenue for local governments, so it's not really relevant to us.

[Yelnoc]

2011 Budget

Regional Spending

Pensions
-Base: $0

Health care:
-Base: $0

Education:
-Base: $0
-Tertiary Education/Other Capital Outlay-Higher Education/Southeastern Educational Incentive Act: $3.5 billion
-Pre-Primary through Secondary Education/Other Capital Outlay - Elementary and Secondary Education/School Choice Initiative: $56.4 billion
-Total: $59.9 billion

Defense:
-Base: $0

Welfare:
-Base: $0

Protection:
-Base: $0

Transportation:
-Base: $0

General government:
-Base: $0

Other spending:
-Base: $0
-Cultural Services/Pentagram Creation Act: $200 million (1 time expense)
-Total: 200 million

Interest:
-Base: $?

Balance:
-Base: -$?

Σ
-Base: $0
-Total: 61.1 billion

Regional Revenue

Income Taxes:
-Base: $0
-Corporate Income Tax/Tax-Corporate Net Income/Put the "free" back in Free Enterprise Bill: 32.5 billion
-Corporate Income Tax/Tax-Corporate Net Income/Southeast Nuclear Energy Initiative, Chapter 4: -66.1 million (-0.0661 billion)
-Corporate Tax Rate: 8.6% (part of Free Enterprise Bill above - remember other provisions).
-Personal Income Tax Rate: 0% (none)
-Total: $32.4339 billion ($32,433,900,000)

Social Security Taxes:  
-Base: $0

Ad-valorem Taxes:
-Base: $0
-Excise Taxes/Tax-Alcoholic Beverage Sales/Southeast Alcohol Initiative, Section 8: $1.3127 billion ($1.00/proof liter or $0.385/gallon for beer, $0.909/gallon for wine, $3.31/gallon for spirits)
-Excise Taxes/Tax-Tobacco Products Sales/Southeast Tobacco Initiative, Section 6:  $0.04/cigarette ($6,034,000,000/year), $0.08/cigar ($80,000,000/year), $2.00/kg tobacco ($24,000,000/year)
-Excise Taxes/Tax-Marijuana Products Sales: $3.00/ounce ($48,000,000/year)
-Sales Taxes/Tax-Public Utilities Sale/Southeast Nuclear Energy Initiative, Chapter 4: 80% of standard electricity excise tax: $0
-Sales Taxes/Tax-Public Utilities Sale/Southeast Biomass Initiative, Section 3: 80% of standard electricity excise tax: $0
-Property Taxes/Tax-Property/Southeast Nuclear Energy Initiative, Chapter 4: n/a ($0)
-Transportation/Tax-Motor Fuel Sales/Transportation Commission Initiative, Chapter 3, Section 22: $0.08/liter ($17,284,230,161/year)
-Transportation/Tax-Motor Vehicle License/Fair Consequences Initiative, Section 3: $10,700,000/year
-License/Tax-Other License/Off-Shore Religious Organizations Initiative, Section 2: n/a ($0)
-Total: $24,793,630,161

Fees and Charges:
-Base: $0
-Other/Charges-All Other/Pentagram Creation Act: $5,700,000/year
-Other/Charges-All Other/Safe Roads Initiative, Section 6: $44,400,000/year
-Total: $50,100,000 ($0.0501 billion)

Business and Other Revenue:
-Base: $0
-Other/Miscellaneous-Net Lottery Revenue/Southeast Lottery Regulations, Section 6 (Amended by Expanding Choice Initiative)
-Total: ?

Total Direct Revenue:
-base: $0

Gross Public Debt:
-Base: $0

State Spending

Pensions
-Base: $3.81 billion

Health care:
-Base: $121.9 billion

Education:
-Base: $0 billion (pre-Educational Hotfix Act)
-Base: $48.9 billion (post-Educational Hotfix Act - original figure was $73.4 billion)
-Total: $48.9 billion

Defense:
-Base: $0.6 billion

Welfare:
-Base: $40.4 billion

Protection:
-Base: $21.5 billion

Transportation:
-Base: $28.2 billion

General government:
-Base: $7.4 billion

Other spending:
-Base: $18.7 billion

Interest:
-Base: $7.4 billion

Balance:
-Base: -$4.4 billion

Σ
-Base: $352.1 billion

State Revenue

Income Taxes:
-Base: $35.6 billion
-Corporate Tax Rate: ?
-Personal Income Tax Rate: ?
-Total: ?

Social Security Taxes:  
-Base: $15.1 billion

Ad-valorem Taxes:
-Base: $252.3 billion

Fees and Charges:
-Base: $107 billion

Business and Other Revenue:
-Base: $132.5 billion

Total Direct Revenue:
-base: $544.5 billion

Gross Public Debt:
-Base: $598.7 billion

[Yelnoc]

Alrighty then.  Now for this.

-Transportation/Tax-Motor Fuel Sales/Transportation Commission Initiative, Chapter 3, Section 22: $0.08/liter

You must be logged in to read this quote.

[Associate Justice PiT]

     I'm guessing the reason that the state spending on education is 2/3rds of the original is because we only repealed the School Choice Initiative about 1/3rd of the way through the year?

[Yelnoc]

     I'm guessing the reason that the state spending on education is 2/3rds of the original is because we only repealed the School Choice Initiative about 1/3rd of the way through the year?

That is correct.  When next years budget is drafted, someone will have to remember to revise that figure upward.

I found a good site for 2006 fuel numbers that I think we can base this off of.  I'll go combine gasoline and diesel sales for the IDS states and be right back.

[Yelnoc]

Fuel Consumption (1000s of Gallons)
Alabama         3,450,983
Arkansas        2,084,115
Florida        10,487,556
Georgia         6,549,461
Louisiana       3,409,534
Mississippi     2,304,533
North Carolina  5,523,563
South Carolina  3,263,772
Tennessee       4,138,498
Texas          15,864,117
Total          57,075,132,000

Note: State numbers are 1000s of gallons, the total is the actual figure.

That is equal to 216,052,877,018 Liters.  So eight cents per liter generates $17,284,230,161 per year. 

[Yelnoc]

And now this.

-Transportation/Tax-Motor Vehicle License/Fair Consequences Initiative, Section 3

You must be logged in to read this quote.

[Associate Justice PiT]

     According to page 12 of this PDF, the state of Montana issued about 131,000 driver's licenses in 2010. Multiplying by (80882282/989415), we get about 10,700,000 issued for the IDS. At an increase of $1 per license, that conveniently gives us $10,700,000/year.

[Yelnoc]

This is the last Ad-valorum tax!

-License/Tax-Other License/Off-Shore Religious Organizations Initiative, Section 2

You must be logged in to read this quote.

[Yelnoc]

Unless we have any offshore religious institutions, I am pretty sure we can go ahead and ignore this.

[Associate Justice PiT]

     I don't even know what an offshore religious institution would be or why that initiative was passed. Unless someone who knows about the reasoning behind it would like to step forward, I agree that we should probably just ignore it.

[Yelnoc]

Ok, one last initiative and we are done with the regional portion of the budget!!!

Other/Miscellaneous-Net Lottery Revenue/Southeast Lottery Regulations, Section 6 (Amended by Expanding Choice Initiative)

You must be logged in to read this quote.

[Yelnoc]

I am thinking that from this we aren't going to be able to place revenue figures in the budget.  Is it another $0 or should we make a note in the education section?

[Associate Justice PiT]

     The Education Tax is equivalent to the difference between the Education budget & the amount put into the Lottery Education Fund, which is equivalent to 90% of what is raised by the regional lottery. If we could find out how much that is, it would be possible to figure out the value of the Education Tax.

[Yelnoc]

     The Education Tax is equivalent to the difference between the Education budget & the amount put into the Lottery Education Fund, which is equivalent to 90% of what is raised by the regional lottery. If we could find out how much that is, it would be possible to figure out the value of the Education Tax.

Are there any other statutes in the region relating to the lottery?

[Associate Justice PiT]

     The Education Tax is equivalent to the difference between the Education budget & the amount put into the Lottery Education Fund, which is equivalent to 90% of what is raised by the regional lottery. If we could find out how much that is, it would be possible to figure out the value of the Education Tax.

Are there any other statutes in the region relating to the lottery?

     To my knowledge, the Lottery Regulations, the Lottery Initiative, & the Expanding Choice Initiative constitute the totality of the laws passed by the region on the subject. Looking at the laws, it seems that the Education Tax is actually only meant to fund the scholarships prescribed by the Lottery Initiatve.

[Yelnoc]

From what I can tell, this whole program is outside the IDS budget in terms of revenue and expenditures.  I think we are done.  I'll post the budget below one last time and then we can move onto the last phase; combining the budgets.

[Yelnoc]

2011 Budget

Regional Spending

Pensions
-Base: $0

Health care:
-Base: $0

Education:
-Base: $0
-Tertiary Education/Other Capital Outlay-Higher Education/Southeastern Educational Incentive Act: $3.5 billion
-Pre-Primary through Secondary Education/Other Capital Outlay - Elementary and Secondary Education/School Choice Initiative: $56.4 billion
-Total: $59.9 billion

Defense:
-Base: $0

Welfare:
-Base: $0

Protection:
-Base: $0

Transportation:
-Base: $0

General government:
-Base: $0

Other spending:
-Base: $0
-Cultural Services/Pentagram Creation Act: $200 million (1 time expense)
-Total: 200 million

Interest:
-Base: $?

Balance:
-Base: $26,327,630,161

Σ
-Base: $0
-Total: 60.1 billion

Regional Revenue

Income Taxes:
-Base: $0
-Corporate Income Tax/Tax-Corporate Net Income/Put the "free" back in Free Enterprise Bill: (see personal income tax rate)
-Corporate Income Tax/Tax-Corporate Net Income/Southeast Nuclear Energy Initiative, Chapter 4: -66.1 million (-0.0661 billion)
-Corporate Tax Rate: 8.6% (part of Free Enterprise Bill above - remember other provisions).
-Personal Income Tax Rate: 5.8% ($$61,650,000,000/year)
-Total: $61,583,900,000

Social Security Taxes:  
-Base: $0

Ad-valorem Taxes:
-Base: $0
-Excise Taxes/Tax-Alcoholic Beverage Sales/Southeast Alcohol Initiative, Section 8: $1.3127 billion ($1.00/proof liter or $0.385/gallon for beer, $0.909/gallon for wine, $3.31/gallon for spirits)
-Excise Taxes/Tax-Tobacco Products Sales/Southeast Tobacco Initiative, Section 6:  $0.04/cigarette ($6,034,000,000/year), $0.08/cigar ($80,000,000/year), $2.00/kg tobacco ($24,000,000/year)
-Excise Taxes/Tax-Marijuana Products Sales: $3.00/ounce ($48,000,000/year)
-Sales Taxes/Tax-Public Utilities Sale/Southeast Nuclear Energy Initiative, Chapter 4: 80% of standard electricity excise tax: $0
-Sales Taxes/Tax-Public Utilities Sale/Southeast Biomass Initiative, Section 3: 80% of standard electricity excise tax: $0
-Property Taxes/Tax-Property/Southeast Nuclear Energy Initiative, Chapter 4: n/a ($0)
-Transportation/Tax-Motor Fuel Sales/Transportation Commission Initiative, Chapter 3, Section 22: $0.08/liter ($17,284,230,161/year)
-Transportation/Tax-Motor Vehicle License/Fair Consequences Initiative, Section 3: $10,700,000/year
-License/Tax-Other License/Off-Shore Religious Organizations Initiative, Section 2: n/a ($0)
-Total: $24,793,630,161

Fees and Charges:
-Base: $0
-Other/Charges-All Other/Pentagram Creation Act: $5,700,000/year
-Other/Charges-All Other/Safe Roads Initiative, Section 6: $44,400,000/year
-Total: $50,100,000 ($0.0501 billion)

Business and Other Revenue:
-Base: $0
-Other/Miscellaneous-Net Lottery Revenue/Southeast Lottery Regulations, Section 6 (Amended by Expanding Choice Initiative): $0 (not directly related to the budget)
-Total: $0

Total Direct Revenue:
-Base: $0
-Total: $86,427,630,161

Gross Public Debt:
-Base: $0
-Total: ?

State Spending

Pensions
-Base: $3.81 billion

Health care:
-Base: $121.9 billion

Education:
-Base: $0 billion (pre-Educational Hotfix Act)
-Base: $48.9 billion (post-Educational Hotfix Act - original figure was $73.4 billion)
-Total: $48.9 billion

Defense:
-Base: $0.6 billion

Welfare:
-Base: $40.4 billion

Protection:
-Base: $21.5 billion

Transportation:
-Base: $28.2 billion

General government:
-Base: $7.4 billion

Other spending:
-Base: $18.7 billion
-Puerto Rico: $17.27 billion

Interest:
-Base: $7.4 billion

Balance:
-Base: -$4.4 billion

Σ
-Base: $311.7 billion

State Revenue

Income Taxes:
-Base: $35.6 billion
-Corporate Tax Rate: ?
-Personal Income Tax Rate: ?
-Total: ?

Social Security Taxes:  
-Base: $15.1 billion

Ad-valorem Taxes:
-Base: $252.3 billion

Fees and Charges:
-Base: $107 billion

Business and Other Revenue:
-Base: $132.5 billion
-Puerto Rico: 24.96 billion

Total Direct Revenue:
-base: $531.9 billion

Gross Public Debt:
-Base: $598.7 billion

[Yelnoc]

Amazingly, this budget leaves us about $3 million in the hole.  Now, onto combination.  That part will have to go through the legislature.  We can go ahead and get rid of the revenue from state corporate taxes because of the bill we just passed.  I'm thinking we should pass an omnibus bill mandating all of the transfers.  This part we actually have some control over the final result, because we can choose which items to take from state budgets and which to leave as is in the regional budget.