I recently read that the state government of Minnesota ran a surplus last year, meaning that they took in more tax revenue than they needed. As a result, they gave the state employees a bonus on their pay. Locally, the municipality I live in announced a tax revenue surplus, and I am hoping they don’t give it to the employees as bonuses. When a governmental body collects too much money from its citizens to fund the business of government, it is not a result of any efficiencies in the governmental body or increased productivity of the public employees.
It seems to me that if a governmental body has a surplus of tax money, it means that they took too much money from the citizens, and should either return that money to the taxpayers, or put that money aside in the event there is a shortfall in future years. They should not pad payroll, add to pensions or retirement plans of governmental employees, or fund an unnecessary pet project.
It is perfectly fine if a private business funnels increased profits to its employees but the same cannot be said of governments who rely on forced taxation for funding. If you are like me, you pay over 9% of your utility bills to your municipality, over 8% in sales taxes on everything you buy, pay real estate and personal property taxes on all owned property. I even pay annual taxes on the furniture and equipment in my office.
I know in these lean times many towns are suffering tax shortfalls, but if your municipality declares a budget surplus, tell them that there is a problem with their tax structure if they are taking more money than they need. The answer is not to find ways to spend the surplus, the answer is to lower taxes.
By: Joe Arndt, Pres. Arndt & Associates Financial Services 8124 Big Bend Blvd.St. Louis, MO 63119.