Tax Guru-Ker$tetter Letter
Monday, March 22, 2004
Bill would let Colorado taxpayers share excess state money - While at first blush, this sounds like a good idea, it's not as practical in reality. I have seen a few times with the PRC, where the State spent millions of dollars sending out tiny refund checks to taxpayers in order to distribute a budget surplus. Then, a few years later, they are running a big deficit and are doing everything they can to raise taxes.
A wiser move would be bank the surplus for the inevitable "rainy day" when black ink turns red. The very legitimate worry that many taxpayers and critics of government have is that the rulers will be unable to resist the urge to spend any excess money if it's not sent back to taxpayers. It would be more cost effective to pass legislation requiring any surplus to be placed into a special reserve fund.