 |
|
There are two forms that are completed, one for the CAFR Review Report Form and the other for the Economic Impact Analysis. [NOTE: In The CAFR eBook both forms are provided and explained in browser format, spread sheet format and word processing format.] If the CAFR Review Form is completed here is what your report will look like. We have rearranged the data so that the report covers these four major categories: Governmental
Funds
The population within the jurisdiction of the government divided into the $5.40 billion provides the per capita surpluses. For the State and many school districts, cities, and counties are contained in the Statistical Section of the CAFR. The problem lies with the counties. You want to use the unincorporated population, not the total population. You may have to contact the county or other organization in order to find out the unincorporated population. For example. If the above State has a population of 2,500,000 then the per capita surpluses are $2,160 (5,400,611 divided by 2,500,000 times 1,000). Remember the above surplus number is in thousands. Many school districts, cities and counties provide their data in actual dollars and not in thousands of dollars. You will have to see from the CAFR what the numbering system they are using. For a family of four the surpluses are $2,160 times 4 or $8,640. THE ECONOMIC IMPACT ANALYSIS REPORT The economic impact analysis discussion was presented earlier. In fact an example of the report was also shown and explained. This part only deals with the report itself. Here is an example of the report with columns and rows shown for better understanding of the formulas used in the computations. The formulas use "/" for divide and "*" for multiply. The formulas are also designated by column (A thru E) and row (1 thru 10). Economic Impact Analysis
Here is the way that I portray the economic impact analysis in the reports. "The Synergistic Magic of Economics. What happens when the government holds the $6.60 billion.
Here is what happens when the $6.60 billion is returned to the taxpayers (the private economy).
In addition, 133,301 jobs are created. This is why it is disastrous for governments to hold excesses/reserves of the taxpayers money." However, in the Report Section there is a sample letter to the government officials that presents this data in a more narrative way. There are two types of reports that I want to present. 1. This report material is what I use in the State reports that is the type that can be used for sending to others or for a web site. 2. The report material that can be used to send to the government officials/representatives explaining the findings and recommendations for their action. Start of Report "Introduction The State of Alabama at the State-level has approximately $9.0 billion of the taxpayer's money it is not using, i. e. surpluses equal to $1,999 for every man, woman and child in Alabama or $7,996 for a family of 4. This does not include all the additional surpluses that exist in the school districts, cities, or counties in Alabama. The Exhibit A below shows the results of the FY 2003 review. What are these surpluses we refer to? Government surpluses, as used in this report, are funds that are not required or needed for the operation of all government operations, funds, accounts, agencies, etc., directly or indirectly, for the year(s) covered by the budget which is usually one year. Theoretically, at the end of every fiscal year, governments should have little or no cash/investments on hand. But what we have found is that most governments have huge amounts of cash and investments on hand at the end of the fiscal year. And somehow these cash and investments are not being recycled back through the budget process the next year, but are being held year-after-year. A Government Can Have a Budget Deficits/Shortfalls and Financial Surpluses At The Same Time. This is the most deceiving topic that governments, politicians, and the news media have conveyed to the public about governmental financial matters. In realty, a government can simultaneously have a budget shortfall and a financial surplus of the taxpayers' money. The problems are focused in four areas:
Running Surpluses is Stealing Although taxation is legitimate, running a government surplus isn't. It represents a taking by the state, because it exceeds the government's contract with the community. It is no different than if a federal agency were to take a person's land or possessions without just compensation (an activity barred by the Fifth Amendment). Excess taxation isn't what the people bargained for. In presuming entitlement or authority not ceded by the community, the state abrogates its moral pact with those it governs. Its power is no longer derived from the people, whose rights to liberty and property it boldly denies. "Collecting more taxes than is absolutely necessary is legalized robbery" - Calvin Coolidge The Governor and the Legislators The Governor and the legislators should include in the next year's budget the previous years revenues not spent as indicated by the CAFR. These were once a revenue and should still be considered revenue for budgetary purposes. Also, they should consider a zero-balance budget concept for all budget and non-budgetary items in the CAFR including the College and Universities and the Component Units. Budgeted expenditures (for the budget) should be last year's expenditures (from the CAFR) adjusted for demonstrated requirement changes in project, program or services. An increase in requirements should include the costs of these additional requirements. Conversely, a decrease in requirements should result in a decrease in costs associated with the decreased requirements. The Governor and legislators should take into consideration the entire financial condition/status of the State in the budgetary process by including all of the funds in the CAFR as being a part of the budget. This system is covered in the CAFR Budget System. This system needs to be implemented in all governments. If the State holds the excesses/surplus, it will earn 4% to 5% on that money. If the State returns the money to the people it will receive 20% in revenue because of the increased economic activity. This is elementary economics. Laws need to be changed. Every thing done by governments is by law. There are laws that state this or that regarding the use of some of the funds. Man made the laws, man can change the laws. How much effort would it be to include at the end of every law "...or if considered excess or not needed for the current operation that the funds will be refunded to the taxpayers?" See how easy it is. At one time every law had its place, but things change. The laws need to be reviewed for change to meet the current needs of the government and the people to release these funds for use/refunded. If this were accomplished, the State would have a huge surplus to refund (rebate or tax reductions) to the taxpayers. Such a refund would create considerable wealth and jobs, increase wages, increase State and local government revenues, dramatically increase the economy, and create the greatest economic expansion in the history of the State. Everyone wins. If you want to know the financial condition of your government(s), do not look at the budget. Get the CAFR. The Synergistic Magic of Economics. What happens when the government holds the $9.0 billion.
Here is what happens when the $9.0 billion is returned to the taxpayers (the private economy).
In addition, 179,954 jobs are created. This is why it is disastrous for governments to hold excesses/reserves of the taxpayers money. Note: The economic impact analysis is further explained at Economic Impact Analysis. The Alabama Trust Fund What you will hear as an excuse regarding the Alabama Trust Fund is that it was created by Constitutional Amendment and therefore cannot be changed. It was created by Constitutional Amendment and it can be dissolved by Constitutional Amendment. The State makes more money if it is returned to the people and not held and invested. The Fund has reached $2.2 billion. If this money was returned to the people here is what would happen.
Here is what happens when the $2.2 billion is returned to the taxpayers (the private economy).
About 44,221 jobs would also be created. What is important about the above is that if the State holds and invests the money it will receive $99 million a year in income. But if it returns the money to the people the State will receive $442 million in revenue every year. That is almost 4.5 times as much money than holding and investing the money. Other words almost 4.5 more funds would be available to use for education or other programs. The business community suffers the most. Before the 9-11 tragedy, President Bush and Congress provided tax rebates which averaged $427 for every American. This was to create an additional $60 billion in consumer (economic) spending, turn the economy around and create jobs for the unemployed. However, 9-11 change that. As the above economic impact chart shows, if the State returned the $9.0 billion in surpluses to the people the State economy would grow by $2,900 per capita. That is 7 times the amount the Federal government used to stimulate the U.S. economy. Businesses net incomes could double or triple. This is elementary economics. Examples The Public Road and Bridge Fund, a Governmental Fund and part of the budget, had net expenses of $962 thousand. It also had reserves (cash and investments) of $508 million. That is 528 years of reserves. The Water Pollution Control Authority, a Component Unit and not part of the budget, made a profit of $7.3 million as a net change in net assets. But it also had cash and investment reserves of $332 million. Unemployment Compensation Trust, an Enterprise Fund and not part of the budget, had net expenses of $175 million. It had reserves of $285 million. That represents 2 years of reserves. The University of Alabama, a Component Unit and not part of the budget, made a profit of $261 million and had cash/investment reserves of $2.0 billion. These only represent four of the 103 funds shown below that had cash and investment reserves not being used. What to do? Unless the budget flaws are corrected and the entire State finances are used in the budget process, the problems that created the surpluses will continue to exist. The budget deficits reported by the Governor and legislatures will be used year after year for the excuses for tax increases and/or to reduce needed services. Just stopping a tax increase or a reduction in services will not solve the problems. The problems will come back the next year. I have provided the details of the surpluses and explained the ways the surpluses are accumulated. The data is accurate because it comes directly from the government's own financial statement, the CAFR. You must provide the where-with-all to convince the Governor and legislatures that the surpluses exist and what should be done about it. I live in Arizona. It is not my money that is at stake." End of Report What to do with the above report I have prepared 39 State reports on the review of the CAFR representing 93% of the U.S.A. population. These reports can be used on a web site for others to see. They can be emailed to others. They can be used for just about anything except for commercial purposes. A list and summary of the reports are contained in Economic Impact Analysis section. Local Reports You will have to prepare these yourself as outlined in the Review Report above for school districts, cities and counties. But they can be emailed to others or put on a web sites for all the see. Here is an email that be sent to all State legislators. All you have to do is take one of the State reports and fill in the blanks. The [ ] are filled in data. the { } are my comments and should be deleted in the final report. [S-C-C-SD] means either the State, county, city or school district. It can be one of these designations or the actual name of the entity which ever is preferrable. Remember you can use this email immediately with all the State reports that I have already prepared. Just copy the data from the State reports into the email. First, highlight the below email. Copy the email to the clipboard. Then go to your email program and paste the email to a new email. Or you can copy the Officials Email.htm file listed below to your email. Do you recall the section on the CAFR Network in which it was stated that one individual sending an email to five individuals, ask them to send the email off to five more individuals and so forth. In ony 8 iterations of five to five, 390,625 people will have been notified. May be you haven't gotten that far yet. Well read it carefully. You should send the email to every representative, not just your representative. You want a response from all the representatives, not just your representative. Here is where you find the email address for your representatives. LINK Start of email We believe that [S-C-C-SD] has [$9.0 billion] of the publics' money that it is not using and should be either returned to the people or taxes/charges for services reduced. That equals [$1,999] for every man, woman, and child in the [S-C-C-SD] or [$7,996] for a family of 4. Our conclusion is based on a review conducted by others of the [FY 2003] [S-C-C-SD] Comprehensive Annual Financial Report (CAFR). As you know this report depicts the annual financial status of all of [S-C-C-SD] financial activities. We believe that government operations, except for retirement/pension funds, employee deferred compensation funds, gifts, donations, and endowment funds, should be on a pay-as-you-go system. Governments should be non-profit organizations. Government potential surpluses, as used in this report, are funds that are not required or needed for the operation of all government operations, funds, accounts, agencies, etc., directly or indirectly, for the year covered by the budget. We have no political aspirations, do not wish to cause embarrassment and certainly have no intent to level accusations at anyone. The purpose of this review of [S-C-C-SD's] CAFR was threefold. First, to determine whether excess/surplus of taxpayers' funds existed and being retained and invested by the [S-C-C-SD]. Second, if they did exist, to make the public aware of their existence, and, third, to suggest that you, as elected public representatives review these findings in the best of the public interest. (It should be noted these are potential surpluses because only an outside review/audit of the surplus issues can determine the exact amounts.) Summary of Findings Based on the review conducted by others, we believe that [S-C-C-SD]. had, in the [FY 2003] CAFR, excess/surplus funds of approximately [$9.0] or [$1,999] per capita or [$7,996] for a family of 4. A summary of the review findings by fund/account/entity is contained in Exhibit A attached. The Synergistic Magic of Economics. What happens when the government holds and invests the [$9.0 billion] or returns the money to the public. The economic impact to the public is staggering. This is based on elementary economic principles.
Here is what happens when the [$9.0 billion] is returned to the taxpayers (the private economy).
In addition, [179,954] jobs are created. You will notice that the [S-C-C-SD] will receive almost [4.5 times for State, 4 times for county and city] the revenue annual by returning the money to the public than holding and investing the money. The Budget and Only the Budget Individuals believe that “the budget” and “governments” are one. This is false as you are aware. The Comprehensive Annual Financial Report (CAFR) is the document that demonstrates the annual financial condition of the [S-C-C-SD].
Your Position and Response We are very much interested in your position and response to the potential surpluses shown in the Exhibit A below and the budget process outlined above. We are not interested in what the Comptroller, Treasurer, other financial individuals say about these issues. You are the one that prepares and votes on these issues. We want your position and response. The others do not vote. {If you have decided to include this email in a web site, then you might to include the following.} Your position and response is important to us because we will enter your response on the [web site address]. In that way anyone can read your response. This will help us evaluate the overall consensus of the [legislature, commissioners, council, board] to the surpluses and budget process. {End of added response.}
Respectfully, EXHIBIT A Review of The [S-C-C-SD] CAFR- FY 2003
End of email [NOTE: The above email is provided in browser format and word processing format in The CAFR eBook.] You probably say that the above is a long email. Many governments do not accept attachments in emails to the government representatives. So it is worthless to send an attachment. You must demonstrate that you have knowledge of the situation because you do not want the government politician to give you a bunch of garbage back. I assure you that if they believe you are not sure what you talking about you will get garbage back. With the above email they know you have knowledge and they better get their act together. Many of the politicians will not respond. That is why I like the part about putting their response on a web site. They will not like this because they must come across as knowledgable about the issues because many voters will see their response. In the above email we used the pronoun "We", not "I". "I" refers to one person. The politicians do not care about one vote. However, for "we" that is a different story. You and your spouse are "we". But so is 50,000. They do not know how many votes you represent. The next point is the "Representative, [S-C-C-SD] CAFR Network." The politicians first question. How many votes are in the [S-C-C-SD] CAFR Network? You will not tell and he/she won't know.
|