The nation of Finland is on the verge of a very significant governmental experiment. The world will be watching closely and, if it works, it will surely spread widely to other countries.
Finland is planning to give every Finnish citizen and legal resident a monthly income of â‚¬800 (about $900). It would go to the poorest of the poor and the richest of the rich alike. To fund it, all welfare programs will be abolished, as will the vast bureaucracies that run them. (It is possible that a few, such as those that deal with the severely physically and mentally handicapped, might be retained.)
There will be no restrictions on the use of the money; no social workers dropping in to make sure recipients are behaving themselves. People can spend the money on food and clothing or on vodka and video games. The money will be taxable, like any other income, but those on the lower end of the socio-economic scale would keep all the money, as they pay no income tax, while those at the top would have much of it taxed away. (The Finnish income tax rate is currently 51.6 percent)
And when those agencies that are supposedly going away start to return, because giving people who are bad with money “free money” isn’t going to make them any wiser, the income tax rate will be up to 71.6%.
Although its 2014-15 budget was balanced, Californiaâ€™s state government ended the fiscal year $175.1 billion in the red, thanks largely to state retirement obligations that had to be included in its balance sheet for the first time.
Under new rules by the Governmental Accounting Standards Board, state and local governments must list unfunded pension liabilities as debts alongside the more traditional bonds and other forms of debt.
Counties and other local governments have been rolling out their annual financial reports this year, some showing multibillion-dollar deficits for pension obligations, so the stateâ€™s report was not unexpected.
A new rule?
Why does there have to be a specific rule when it comes to budgeting that you should list ALL of your obligations for the year AND balance the budget?
Ohhh, politics. Sorry I forgot about that.
I’m going to prognosticate a doubling of property taxes that will chase the remaining sane peoples out of the state.
And even that won’t be enough to stop the flow of red ink in the offices of the GASB.