State Spending and Cash Surpluses

Ran into this website through an email list. Interesting and something I never knew... An excerpt from the introduction:

Simultaneous Budget Deficits/Shortfalls AND Financial Surpluses
This 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.

This website tracks individual states and tallies up their budget surpluses. I live in WA State we have a surplus of over $20 Billion Dollars. Interesting to know because various groups have been griping about how programs are being cut for lack of funds while the state is sitting on a cash reserve. I do not agree completely with the authors of this page -- they want the budget to be spent completely with zero funds held in reserve. We should have a slush-fund that can be quickly mobilized for emergency situations but not $20 Billion -- that's real money!