Monday, November 14, 2011

More Can Kicking, Obfuscation and Pyramiding In the Budgets Around the Country

Who says that taxes go for roads?
When the recession squeezed Miami's budget in recent years, officials reached into funds raised for road repairs and other projects to plug the shortfall.

Now, the city is paying a price. The moves triggered lawsuits and a federal investigation, in a brouhaha that holds ramifications for how municipalities nationwide maneuver around unprecedented money problems.

Cities and states across the country are using money designated for specific purposes—such as fixing roads or sewers—in order to fill financial holes elsewhere, according to public officials and records. The moves are exposing municipalities to controversy, as federal regulators and local auditors are more heavily scrutinizing their finances to protect bond buyers and taxpayers.

In Miami, the Securities and Exchange Commission is wrapping up an investigation into whether the city used funds intended for roads and other purposes to fill budget gaps elsewhere, according to people close to the probe. Bondholders are suing, saying the moves obscured the city's true finances. The city's former budget director is also suing, claiming he was fired for cooperating with the SEC and the Federal Bureau of Investigation.
The Real Effect
Readers from the beginning remember the shenanigans that the local school districts were pulling in an attempt to rape tax the taxpayers out of their hard earned cash. Items that needed to be budgeted were not and put to the taxpayers as some sort of "special need". Roof replacement and other usual items became the rallying point to increase the budget, not cut uneeded programs or pull back on teacher salaries and benefits. And just what was "needed"? Why everything of course. TVs, computer labs, Wi-Fi, you name it, it's ne-ce-ss-ary for the edumutation of the children!

Naturally, all of this funding had to come from someone's pocket, namely the local taxpayer and contrary to government positions, it was not a bottomless pit. So in time, a level of resistance was hit. At that point the unions engaged in demonization tactics to paint the people who paid for all of this and most importantly, their CUSTOMER as brutal heartless scum who wanted nothing more then poor people to work in their dust factories. This allowed the scam to continue for a few more years.

Well, we have reached the tipping point where so much has been consumed that there is literally NO MORE "extra" to fund, honestly, anything. So for the last 10 years government budgets have been "gimmicked" into obscurity with funds being raided, bonds being sold and rules being created that allow the game to continue. But perhaps the most crucial part of this is that the taxpayers are left holding the bag. There is a term for this....


All around the world, individuals, counties, nations and now extra-national entities known as "unions" have allowed these game players to up their salaries, up their budgets and raid funds that would have otherwise been protected from their shenanigans. If you or I were financial advisers and pulled this junk, we would be in the slammer doing 20-30 years for grand theft. As we should be.

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