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I have just one question for our various state governmental authorities: Where did all of the money go?

By
Real Estate Broker/Owner with Richard Weisser Realty

Georgia State CapitolI wrote a post last night about cutbacks and the potential closing of state parks in Georgia that got me to thinking: Where does all of the money collected by the states go?

In Georgia, we pay both a 6% state income tax and at least a 6% sales tax including local options. (In some areas as high as an 8% sales tax.) That's a pretty high combination of tax levies compared to aggregate levels in other states.

I mean really, when you speak specifically about the state  and the amount of revenue that is collected, verses the amount that is spent, you have to ask this question. Here are some common answers:

  1. Schools.
  2. Roads.
  3. Police and Law enforcement.
  4. Justice.
  5. Fire and paramedics.

However, most of these services either get their money from some another source or they generate their own income to offset their expense. Schools are funded by county property taxes.

Old Coweta County CourthouseCounty roads are funded by ad valorem taxes on vehicles. There is an additional motor fuel tax on every gallon of gasoline to pay for roads at the state level.

Police and judges collect fines and court costs. If you have ever been cited for speeding, you know that it is not an inexpensive proposition. If you have ever had to call for a paramedic or ambulance, you know that you get a bill. And it's a whopper!.

The simple truth that no one will tell you is that a large portion of revenue collected at the state level goes towards paying debts that politicians of the past incurred for political expediency and for unfunded pensions.

We are essentially paying for the mistakes and miscalculations of the past, and are facing the proposition of diminished services today as a result.

You can't keep borrowing money forever and hope that revenues will keep increasing to both pay the debts and maintain a proper level of essential services.

All we need is common sense and accountability. Yeah, like that's going to happen!

Edited for clarification ...Thanks to Tammy Lankford!

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Comments (55)

Realty Dot Com (Realty.com)
Realty.com - Charlotte, NC

Very interesting.

Jun 02, 2009 05:56 AM
Richard Iarossi
Coldwell Banker Residential Brokerage - Crofton, MD
Crofton MD Real Estate, Annapolis MD Real Estate

Richard,

You could get into Area 51 easier than finding where your tax dollars are going. Information is power, and the pols aren't giving up any power.

Rich

Jun 02, 2009 06:03 AM
Richard Weisser
Richard Weisser Realty - Newnan, GA
Richard Weisser Retired Real Estate Professional

Mark...

It really does ...over and over again! Thanks for the comment!

Joe...

I'm looking through the state budget now ... 260 pages! THX

Jun 02, 2009 06:06 AM
Cherry Temple
Real Living At The Beach - Myrtle Beach, SC

Richard, Interesting question with no easy answer.  In my county we should be very rich.  However, we have some strange tax laws down here in South Carolina.  First of all - most of the good ole boys seem to think that poor and blue collar folks should pay the bulk of the tax burden - therefore we have really high sales taxes these days thanks to a basic lack of understanding by our elected officials of Economics 101, we have fairly high personal property taxes, but where we have true wealth in our county - land and homes - taxes are almost nil.  Go figure?  We can't afford to pay our police, we can't afford to pave our roads, fund social services or even provide parks for our residents - but we have cut property taxes again and again.  One of the few taxes we can actually deduct when filing state and federal taxes.

I think another problem is the combination of increased services in some areas along with tax breaks over and over again for corporations throw in for good measure - day after day - hour after hour of nothing but - We have High Taxes over and over again - whether it is true or not - and people are believing it and refusing to fund services that need funding. 

Jun 02, 2009 06:11 AM
Michael Setunsky
Woodbridge, VA
Your Commercial Real Estate Link to Northern VA

Richard, my State instituted the Lottery a few years ago to help pay for education. I wonder why, the public is asked to donate school supplies every year and why they are cutting music programs, etc. Where is the money going???

Jun 02, 2009 06:59 AM
Jason Crouch
Austin Texas Homes, LLC - Austin, TX
Broker - Austin Texas Real Estate (512-796-7653)

Richard - I think that sums it up very succinctly.  We are paying for past mistakes - nicely stated.

Jun 02, 2009 07:01 AM
Lisa Hill
Florida Property Experts - Daytona Beach, FL
Daytona Beach Real Estate

I can't believe you have both state and sales tax, and the state still does the same crap that every state does. They abuse the funds, and care nothing about the tax payers. Everything relating to government just disgusts me.

Jun 02, 2009 07:35 AM
Anna "Banana" Kruchten
HomeSmart Real Estate - Phoenix, AZ
602-380-4886

Richard I'm all for accountability.......but seeing that happen anytime soon.....really see it.....like really see it?  Seems like we're alwasy paying backwards....not forward.

Where does all the money go in my state.  This is a very good question.  One I wish I had more time to research etc.  But it has raised my awareness and I will now pay more attention.

Jun 02, 2009 07:36 AM
Gary Woltal
Keller Williams Realty - Flower Mound, TX
Assoc. Broker Realtor SFR Dallas Ft. Worth

Richard, isn't this why they have government accounting offices to review and publish the revenues and expenses each year for our clear understanding of where the money went??

Jun 02, 2009 09:37 AM
Richard Weisser
Richard Weisser Realty - Newnan, GA
Richard Weisser Retired Real Estate Professional

William...

A good example is our Department of Natural Resources which administrates our state parks. They are projected to collect $49M in fees and are budgeted under $107M, so the taxpayers have to fork out $58M.

Small change for a state of our stature!

Andrea...

I have been studying the budget all day! There are a lot of hands in the pot! THX

Jun 02, 2009 10:12 AM
Christianne O'Malley
Dickson Realty - Reno, NV
Exceptional Service - Delivering Results in Reno!

The only statement I disagree with is where law enforcement gets their funding. My husband is a Trooper for the Nevada Highway Patrol and it may surprise you to discover that the fines from the tickets he writes go to the jurisdiction in which he writes the ticket...ie, if he writes a ticket in Douglas County, the fines to go Douglas County. His department is funded from the Department of Homeland Security.

Jun 02, 2009 10:14 AM
Terry & Bonnie Westbrook
Westbrook Realty Broker-Owner - Grand Rapids, MI
Westbrook Realty - Grand Rapids Forest Hills MI Re

Every state has reasons for the excesses of the past that we have to pay for and when the economy was growing they always thought next year would pay for last years decisions. Now it is time to live within there means

Jun 02, 2009 02:27 PM
Katerina Gasset
The Gasset Group & Get It Done For Me Virtual Services - Provo, UT
Amplify Your Real Estate & Life Dreams!

Richard- Very good points! There is so much waste and fraud. There is also untold mismanagement and lack of skill in the government sector to learn how to treat their dept like a business. More of these projects should be privatized and then you will see how they will tighten their purses. Katerina

Jun 02, 2009 02:46 PM
Aaron Poling
Long & Foster - Martinsburg, WV
Working to get YOU the BEST Deal!

accountablility now that a word that we dont hear too many politicians using. I agree we need answers. There should be a published list every year explaining where our money is going.

Jun 02, 2009 02:59 PM
Katerina Gasset
The Gasset Group & Get It Done For Me Virtual Services - Provo, UT
Amplify Your Real Estate & Life Dreams!

Richard- I also wonder where all the lottery money really goes!

Jun 02, 2009 03:16 PM
Lane Bailey
Century 21 Results Realty - Suwanee, GA
Realtor & Car Guy

Did you hear that Gwinnett County has just decided not to raise the property taxes?  There was a little resistance.  They were having trouble understanding that if WE need to cut back, maybe they do too.

Jun 02, 2009 04:02 PM
Christine Donovan
Donovan Blatt Realty - Costa Mesa, CA
Broker/Attorney 714-319-9751 DRE01267479 - Costa M

I have no idea where the money goes; I just know the government keeps asking for more of it.

Jun 02, 2009 04:52 PM
Jesse Clifton
Jesse Clifton & Associates - Fairbanks, AK

Just imagine what that speeding ticket will cost in a decade or so when we start having to pay for the sins of the current administration.... Yikes.

Jun 02, 2009 05:07 PM
Larry Brewer - Benchmark Realty llc
Benchmark Realty LLc - Nashville, TN

Richard - In Tennessee, we have no income tax, and when the topic comes up, we always us Georgia as a reason that it doesn't help. It just costs the taxpayer more, you don't really get anything for it.

By the way, a lot of people from Georgia move to Tennessee to get away from the income tax.

Jun 03, 2009 12:11 AM
Lane Bailey
Century 21 Results Realty - Suwanee, GA
Realtor & Car Guy

Now Fulton County has decided to look into raising property taxes because they don't want to cut their budget...  When  are these cities and states and federal governments going to figure out that they need to learn to diet, too...

Jun 04, 2009 04:16 PM