Friends - thank you for your support and involvement with the Center for Fiscal Accountability. Building on the success of our Cost of Government Day Report, we are re-launching as the Cost of Government Center. The Center will be able to focus more heavily on fighting the growing burden of government by leading the fight against exessive government spending, overbearing regulations and excise taxes.

Please be sure to update your bookmarks. You can find the Cost of Government Center on Facebook and on Twitter @CostofGovt. We will continue to produce the annual Cost of Government Day Report and our new annual publication, Tax Bites.

See you at the COGC!

Congratulations Connecticut and Happy Cost of Government Day! Connecticut “celebrates” the final Cost of Government Day, twenty-nine days after the national average of August 12. Connecticut taxpayers work longer than residents in any other state to pay off the cost of spending and regulations – 253 days out of the year.

In the last ten years, Connecticut legislators have increased taxes by $10.47 billion – an average tax increase of $2,969.90 on each man, woman, and child. Connecticut taxes have increased the 2nd most per capita since 2002. These taxes are used to increase state spending programs and do not even include how local governments also increase the tax burden.  If one examines only state and local taxes, Connect taxpayers pay 12.0 percent of all income each year in these liabilities – the third highest rate in the nation.

Unfortunately, Connecticut does not appear to be looking to relinquish their last-place standing for latest Cost of Government Day. For the FY 2012-13 biennial budget, the State of Connecticut is forecasted to increase spending by an additional $2.94 billion – an annual increase of about 4.5 percent. This increase in spending was made possible by the state’s largest tax increase in its history - $3.7 billion.

Tax increases include:

• Sales tax increase from 6 percent to 6.35 percent
• Tax on American production of yachts, jewelry, and wedding gowns
• An internet tax on online sales that will drive advertisers out of Connecticut
• Increasing the cigarette tax from $3.00 per pack to $3.40 per pack

Without serious spending reform, Connecticut’s upward trend in spending is sure to continue. Happy Cost of Government Day! Congratulations on 1st place for the 10th consecutive year.

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New Jersey “celebrates” the second latest Cost of Government Day in the nation – twenty-five days later the national average of August 12. The Cost of Government Day measures the calendar date by which the average American paid off his/her share of spending and regulatory burdens on all levels of governments: federal, state and local. New Jersey taxpayers work longer than citizens in 48 other states to pay off the cost of local, state and federal government – 249 days out of the year.  

Tax hikes in Jersey have topped $42 billion over the last two years; consequentially, New Jersey taxpayers have experienced the highest increase in taxes for each man, woman, and child - $4,905.20. This is a total of $19,620.80 in new taxes levied on a family of four. These taxes are used to increase state spending programs and do not even include how local governments also increase the tax burden. As of all the states in 2009, New Jersey had the highest joint state and local taxes as percentage of state income: 12.2 percent. Working to reduce the tax burden on the New Jersey economy in order to increase revenues through economic growth, Governor Chris Christie submitted tax reform proposals in his FY 2012 budget proposal for workers and small businesses.

Democrats disregarded Governor Christie’s budget and submitted a budget six days before the close of the 2011 fiscal year to increase spending for 2012 by $300 million above revenues. Using his line-item veto, Governor Christie eliminated $900 million in spending from the Democrat budget to ensure that projected spending would fall below projected revenues for the coming year. This represents the first in many necessary and significant steps toward addressing New Jersey’s $33 billion debt cause by rampant overspending under previous administrations.

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Today, Chairman of the House Oversight Committee Darrell Issa announced the launch of a new website, SavingThePostalService.com, an effort to publicize the growing burden the taxpayer-subsidized mail service has on Americans. Rep. Issa has already introduced legislation that would make essential reforms to the US Postal Service, which overspent its budget by $7.5 billion in 2010, profligacy that is expected to grow to an $8 billion deficit in 2011.

As a government-run organization, the Post Office is isolated from the innovation of marketplace competition. Unlike its private sector competitors, the Postal Service does not pay the corporate income tax, is exempt from anti-trust laws, and is advantaged by unique customer access opportunities such as having mailboxes on the street.

Despite these legal protections, USPS spends in the red while generously paying employee benefits above and beyond levels for other federal workers. While postal workers only pay 21 percent of health care costs and none of their life insurance premiums, federal workers pay 28 percent of healthcare costs and are responsible for 100 percent of their life insurance costs. If Post Office employees were paid at equivalent levels as other federal workers, $1.4 billion could be saved.

Other key reforms in the Postal Reform Act of 2011 include:

• Save $4 billion by closing half of the Post Offices in areas with low demand and high capacity
• Save $6 billion by cancelling weekend delivery

Compared to the private sector, over 80 percent of the Post Office’s costs are labor related, while FedEx and UPS spend 20-40 percent less. Even if Post Office workers were paid equally with federal workers, there are still more potential savings by paying workers a market equivalent wage. The Americans for Tax Reform Foundation’s 2011 Cost of Government Day report further explore the burden place on taxpayers by the government-run Post Office. The report identified savings of $19.87 billion annually and provides a serious discussion about privatizing the service and letting the free market work. You can read the report and related case studies here.

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Today, New York “celebrates” the third latest Cost of Government Day in the nation – eighteen days after the national average of August 12. The Cost of Government Day measures the calendar date by which the average American paid off his/her share of spending and regulatory burdens on all levels of government: federal, state and local. New Yorkers work longer than residents of 47 other states, amounting to 242 days out of the year.

For three consecutive years, New York legislators have increased taxes. States tax increases between 2002 and 2011 totaled $51.9 billion - $2,650.30 for each man, woman, and child. New York taxes have increased the fifth most per capita since 2002. These taxes do not even include various municipal tax increases as well. New Yorkers lose 12.1 percent of their income to state and local taxes every year – the second highest rate in the nation. For FY 2011, Governor Patterson and his tax-and-spending crew increased taxes by nearly $1 billion on clothing sales. Simultaneously, Governor Patterson signed on to a FY 2011 budget projected to increase spending by 2.4 percent.

When Governor Andrew Cuomo assumed office in January, he worked with the legislature to create an FY 2012 budget reduced spending by more than 2 percent, the first spending decrease in New York since 1997. New Yorkers are still overtaxed and tax reforms should be enacted that encourage investment and job growth in the state. Governor Cuomo pointed out during his state address that New York taxes are “66 percent higher than the national average.”

New York’s Cost of Government Day has a long road to improvement; until then New York is the “proud” recipient of the bronze medal for most expensive Cost of Government in nation. Congratulations New York!

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