Monday, January 10, 2011

GOP promises: Will they cut $100 billion?

No, I doubt it. But can they? Yes, they can.

Fiscally conservative members of Congress simply need to understand the tricks used by The Big Spenders. One such trick is an encumbrance.

Let me explain using an example of the now extinct balanced budget:

Federal budget = $3 trillion
Money spent or cash out-the-door = $2.9 trillion
Money encumbered = $100 billion

In this case, the $100 billion of encumbered money is related to various programs or projects.

Some is likely encumbered on a department's electric bill. And some is probably encumbered on rail trail money. Yes, the rail trail.

Didn't you notice that the $560,000 has been available for ten years now? Well, encumbering money is a typical way for The Big Spenders to hide the money hoping that people forget. But money can be encumbered on anything. Electric bills and rail trails are just two examples of federal encumbrances.

And if my understanding is correct, then the $525,000 state grant for turf could be characterized as encumbered money.

Continuing to the local level, who can forget the 2009 publicity regarding the $900,000 Public Works garage slush fund? That money was encumbered back in the 1990s.

So it happens at all levels of government: federal, state and local. And the Board of Ed encumbers money annually.

To be clear though, not all encumbrances are bad. I think it makes sense to accrue for your monthly telephone or electric bill.

But the bottom line to me is that there is a lot of encumbered pork that could -- and should -- be cut by the various governing bodies. Unfortunately, the collective mindset of most legislative bodies is spend, spend, spend! And of course The Big Spenders view the money as "already spent." So it doesn't even cross their mind that this is an area where taxpayers could save money.

If you have the time and inclination, I encourage you to call some elected officials and ask them if they would consider defunding some encumbrances. At the town level, you could follow the lead of Councilman Jimmy Sima and request the encumbrance list to begin looking for spending reductions.

Tim White


Anonymous said...

Any one notice no one posts here any more since tim moved away
So i guess tim did most of the posting as a ghost
Sad there are better ways to spend your time

Anonymous said...

"If you have the time and inclination, I encourage you to call some elected officials and ask them if they would consider defunding some encumbrances."

Which encumberances, specifically, are you referring to?

Tony Perugini said...

Tim, besides the medical trust fund where else would you recommend I look into for encumberances on the BOE? I will request a list of encumberances but wanted to see if there's something I missed.


Anonymous said...

this is the tony and tim speak to eachother blog

Anonymous said... may to consider a Speak 'n Spell.

Anonymous said...

Cut $100 billion? That's a joke. They're too busy giving away the store to the oil, insurance, banking, mining and all their other special interest groups. They know that when they leave office they will be very well taken care of by those that they helped at the country's expense.

If they were really interested in cutting the deficit, they would have never given the rich the tax extension. This act alone shows that the Republican party leaders are only interested it the upper 2% of the income bracket and the hell with the country.

tim white said...

12:56... no specifics... just trying to shed some light on the tactics used by government. I know I didn't fully grasp it when I got involved in the Council... so I imagine most voters are not fully aware of it. And I really got my hands around it in only the past year or two... as it goes with most of Cheshire's spending initiatives, the TM certainly wasn't going to highlight it for the Council and say "here's a place where you can cut spending."

tim white said...

Tony... Jimmy already has the BOE list of encumbrances. Not much jumped out at me. I suspect the unnecessary, long-term encumbrances are more likely to be capital projects (not monthly utility bills or routine medical bills). So it may be that all that stuff sits on the town's ledger. Not sure. Definitely worth looking into though.

Tony Perugini said...

Tim, the one I'm quite familar with is the medical trust fund and during tonight's account review meeting a couple of things jumped out regarding it. I'll post details on my site. As always, thanks for the input.

Tim White said...

ah yes, the medical trust fund...

For years, Bill Kunde demanded answers. He was convinced that, despite claims that the BOE had no "cushion" as the Council does with the rainy day fund, the BOE did have a cushion called the Medical Trust Fund. He pushed for years and it was continually denied.

A couple years ago though he finally got the admission he wanted. Although it never made any headlines, during a BOE / Council meeting, GF finally acknowledged that he uses the medical trust fund as a cushion for the BOE budget... and that it's not necessarily related to medical expenses... despite what the public had been led to believe.

If I recall correctly, it's not that money is taken out of the MTF for non-medical expenses. Rather, money is placed in the MTF monthly. But that monthly figure changes (not every month, but it does change), depending on various issues. The number could go up or down. It's dealing with reality... which is not bad. But to suggest that the BOE has a set amount and that is what is used annually is simply not true. Kunde pushed for years on that one and he finally got the answer he knew to be true a few years ago.

The MTF is effectively the same thing as the Council's rainy day fund. But not many people know it.

Anonymous said...

tim talks to tony and tony talks to

Anonymous said...

If that is true 1:09, why are you still here and posting?