Rock-solid fiscal gimmickry
I’m stealing the idea for this post from Doug – I would say unabashedly, but apparently I’m “bashed” enough to still give him credit.
Just last week, outgoing Indiana Governor Mitch Daniels gleefully announced that more than 3 million Hoosier taxpayers would be getting one hundred and eleven Tricky Dick Fun Bucks during tax season.
In 2001, Daniels – as George W. Bush’s budget director – helped usher through a gimmick in which taxpayers would receive a $300 check from the US Treasury.
In 2011, he somehow convinced Hoosier lawmakers to let him try the same gimmick again. And now we get a $111 credit on our state tax bill ($222 for heterosexual couples filing jointly), while we never know exactly how much more we’re paying to the state under Mitch’s sales tax increase.
In his press conference, Mitch boasted that part of this stunt was “to celebrate the fact that Indiana’s in the kind of shape where a refund will happen.” (Transcribed from mp3 audio.)
“Past a point of rock-solid fiscal strength, it’s better to leave this money in the pockets of those who earned it than to let it burn a hole, as it tends to do, in the pocket of government.”
So what constitutes “rock-solid fiscal strength” in Daniels’ mind?
- A debt of $1.8 billion to the federal government for our state’s Unemployment Insurance fund. (A fact strangely omitted from the Gov’s fiscal information fact sheet.) And Hoosier businesses are paying a penalty of about $42 per employee, an amount slated to increase “until Indiana’s unemployment insurance fund meets specific federal solvency standards.”
- Indiana’s public pension funds are underfunded to the tune of about $14 billion. Put another way, the state has set aside only 65% of the money it has already agreed to pay. And in 2010, Indiana paid “just 23 percent of what the state should have paid to fund retiree health benefits.”
- The “discovery” of $320 million in missing taxpayer dollars in December 2011. Which was followed by the state “discovering” it had held back $206 million that should have been distributed to Indiana counties.
- Nearly $2.9 million in fees and interest charged to state departments and agencies in 2010 & 2011 for simply not paying their bills on time.
State lawmakers, meanwhile, are seeing a much less rosy picture than Daniels’ “rock-solid fiscal strength.” Tom LoBianco writes for the AP in a piece titled, “Grim budget picture shapes up for Indiana lawmakers”.
State tax collections — the lifeblood of the budget and everything from road-paving to classroom sizes — could remain stagnant as the state continues to crawl out of the recession. Pent-up demands from groups and agencies cut over the last four years are already meeting with intense skepticism from lead budget-writers. And money from Indiana’s expansive gambling industry, the third-largest source of money for the state, is dropping amid competition from neighboring states, which have legalized gambling as a means to patch their own budget holes. […]
Even though lawmakers and governor-elect Mike Pence come into 2013 with a state flush with cash reserves worth an estimated $2 billion, they’re facing programs starved for support — including the Department of Child Services, which told lawmakers it has trouble holding caseworkers because of low salaries — and a continued economic drag.
I think it’s fair to say that Governor Daniels and I have very different definitions of “rock-solid fiscal strength.”