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June 27th, 2011 2:02 pm
5 Common Gimmicks States Use to ‘Balance’ Budgets

After California Governor Jerry Brown (D) vetoed the legislature’s budget bill, many questioned the definition of a “budget gimmick” since both Brown and the legislature accused the other of using accounting tricks and unrealistic assumptions to balance the state’s budget.

Thankfully, the Arizona Capitol Times has an answer.  Actually, it has five.  Here are the most commonly used gimmicks states employ to meet the technical (i.e. constitutional) requirement to balance their budgets.  (Note: Examples of states doing these are indicated by their two letter abbreviation.)

(1)   Putting off payments – can include delaying or skipping payments to schools and pensions (Ex: IL, MN, NJ)

(2)   Accelerating revenue – this gimmick collects taxes like those on sales early (TX)

(3)   Using temporary money for recurring expenses – spending ‘rainy day’ funds to cut the grass (HI)

(4)   Counting on savings that aren’t likely to materialize – one example is mandating less spending without enacting a specific policy change (CA, CT)

(5)   Counting on revenue that isn’t likely to materialize – such as counting on a federal bailout or stimulus funding that does not appear (NY, CA)

So, there you have it: A five-point B.S. meter for judging the seriousness of your state’s “balanced” budget.

I wonder if the Tea Party is readying state constitutional amendment drives to ban these practices and give their balanced budgets more credibility…

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