STRAPPED STATES HIDING FLUSH RESERVES?
July 10, 2004
12:46 AM Eastern
Governor Arnold Schwarzenegger recently came under fire after announcing a way to trim $16 million dollars a year off the state's budget by shortening the time local governments can keep dogs alive at animal shelters. Instead of the current mandate under a 1998 law where the animal is kept alive for six days, Schwarzenegger announced the forced euthanasia would happen in half that time - three days.
Shortly following the Governor's announcement, the State Capitol had a large number of unexpected and very angry visitors. Dog owners from all over brought their beloved pets to the Capitol to send the Governor a message - one which he heeded within 24 hours and backed off his proposed budget cutting measure.
Sue Collins, who adopted her two dogs from the local animal shelter, wondered why the Governor wasn't addressing one of the real budget questions: "Every year, we taxpayers of California are fleeced to the tune of $8 billion dollars to pay for the three million illegal aliens in this state. Yet, Arnold wants to cut $16 million from the budget by killing off dogs quicker? Why not round up these illegals, deport them and stop forcing the productive in this state to pay for those who break our laws by sneaking across the border? $8 billion vs $16 million. It's a no brainer, Governor!"
On June 29, 2004, it was announced that Schwarzenegger recently gave his office staff new pay raises: up 8% and that he's paying out more six-figure salaries than his predecessor Gray Davis. "For a governor who came to office saying he would cut the government, he seems to have really pumped it up, at least salaries for his inner circle," Jamie Court, a consumer activist with the Santa Monica-based Foundation for Taxpayer and Consumer Rights, told The Associated Press. "It doesn't show much respect for taxpayers."
Mel Starveson has lived in California all his life, but says when he retires next year, he and his wife will be leaving the LA area and moving to Nevada where there is no state income tax. As for the deficit in his home state, Starveson says that the first thing Schwarzenegger should have done as governor was to put the National Guard on the border and seal it up. "Instead, hard working people like me and my wife continue to hear how broke the state is while all these illegals run free in this state." Starveson also went on to say that exchanging Davis for Schwarzenegger was no great gain, "We threw Davis out of office because he wanted to give illegals driver's licenses and now this guy playing Governor is working to basically do the same thing! Half of LA looks like the slums down in Mexico and you can't go anywhere anymore and hear English spoken. We're getting out."
Other states like Kentucky and Michigan are letting 'low level felons' out of prisons and jails early in an effort to cut state budgets. Many wonder how responsible it is to let felons out of jail early to save money instead of cutting bloated state government bureaucracies.
But, are the states really cash strapped? Not according to Gerald R. Klatt, Lieutenant Colonel, USAF (Ret.) (search). Klatt has been attempting to educate taxpayers all over this country about how state governments actually formulate budgets and are in reality stealing the taxpayer blind. According to Klatt:
"Simultaneous Budget Deficits/Shortfalls and Financial Surpluses 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.
"A budget is an estimate of the amount of money to be received and the amounts to be spent for various purposes in a given time. It is a planning and monitoring document. It matches revenues (income) and expenditures (expenses) for a given period of time which is usually one year for most governments. It does NOT demonstrate the financial condition of a government.
"You continually hear the phrase "budget shortfall" or "budget deficit." What this means is that projected (planned) expenditures will probably exceed projected (planned) revenues. When this happens, governments immediately want to raise taxes and/or reduce services regardless of the financial condition of the government. It works every time."
Klatt maintains that the only way taxpayers of all states of the Union can understand deceptive accounting methods hiding huge reserves in all states is to review what's called a Consolidated Annual Financial Report or CAFR. The CAFR is prepared under the accounting and reporting standards outlined by the Government Accounting Standards Board (GASB). It is an audited report and according to many CPAs who have taken the time to examine these documents, every state of the Union is hiding billions in reserves and deceiving the taxpayers into believing the states lack operating capital and need to continue raising taxes.
Walter Burien (search) has been a national spokesman for years regarding the CAFR issue calling it "the biggest shell game for theft in this world's history." Burien also says, "Outside of any politicians doublespeak, the CAFR is just plainly the Annual Financial Statement of a Government Corporation. The plain fact is that the government(s) have held back their Financial Statement, the CAFR, from the public for the past 45 years."
As the issue of pressing hard working Americans for more and more taxes within the states to make up for alleged budget shortfalls, the true state of finances is likely to become a heated one and could effect the outcome of elections this coming November for state legislators.
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