What, you don’t think it’s a good idea to keep some money in the bank to deal with unexpected expenses? I’d rather we do that, than have to go borrow money, or raise taxes.
“Why not collect exactly what you need and no more?”
You never want the state to have $0 in the bank account. That is how you run deficits. Revenue streams are not consistent. They can plan all they want but in reality, the numbers can be off. This time, they were 40% off but in a good way.
Indiana, under Mitch Daniels, has tried to keep $1 billion in reserve. A few years ago, when the economy first turned sour, the Dems wanted Daniels to use that extra $1 billion immediately. He said no and we are lucky he did. It’s been useful in some of the state budget shortfalls the last two years.
In Missouri there is the “Hancock Amendment” which provides money back to taxpayers when the State ends up more than 2% in the black I believe.
The fact is that budget revenues are merely estimates and if your State gets a windfall that increases revenue dramatically, it should go into your coffers as either a payment on accrued debt or into a reserve if your State is debt free (all States carry debt at this point).
But I agree that the reserve coffers need to be limited so that the State is not stagnating a lot of taxpayer money.
Why are the excess $$’s are held by a state? Don’t they belong to the taxpayers?
In Indiana, any retained surplus in excess of (I think) 10% of the State’s annual budget must be returned as tax refunds. Indiana is presently sitting on about 9.1%; which, of course means that with the Republicans controlling the Governor’s office and both houses of the legislature (for the first time in a generation) There should be a nice refund check in the mail prior to next year’s election.