Where Your Money Goes

Timothy L. Coyle
Consultant specializing in housing issues

Ever wonder where your tax dollars go every year?  Certainly, you know that federal, state and local governments hire a lot of people – and you pay for that.  And, they’re working for you, in case you didn’t know.  Remember that the next time you visit the local Department of Motor Vehicles (DMV).  You will likely come away with a changed impression of what you’re getting for your money.

There are somewhere between seven and nine million federal employees in the nation – administering programs like Social Security, Farmer’s Home loans and food stamps – at a cost to federal taxpayers in the tens of billions.  Complimenting this public workforce are the more than 19 million state and local employees in the United States.  These are the workers behind the counter at your local police departments, your county health agencies and the teachers at your local public schools.  We were able to peg their annual payroll to be just over $77 billion – that’s for mostly teachers and other public school employees. 

Federal employees occupy millions of feet of office space – paying (you pay) rent and utilities – in over 440 agencies across the land, from the Administrative Conference of the United States to the Chemical Safety and Hazard Investigation Board to the Electronic Commerce Advisory Commission to the Local Television Loan Guarantee Board to the National Gambling Impact Study Commission to the Presidential Commission on Assignment of Women in the Armed Forces to the all-important Susqehanna River Basin Commission.

It’s nearly impossible to calculate floorspace taken up by all of government (federal, state and local) in the country but it’s a lot.  For example, comprehending what you pay for hundreds of millions of feet of local classrooms – controlled by the tens of thousands of local school districts in the country – is tough.  But, you’re paying for it, nonetheless.  Out of your other pocket come the federal, state or local taxes for poverty programs, for fixing your roads and for issuing subpoenas, to begin with.

So, are you getting your money’s worth?  Hard to tell.  It’s difficult to ignore all that comes from government when, say, a new subdivision is approved, though.  We know, for instance, what the various capital improvements are made and probably can gauge their cost with some accuracy.  But, while those costs are paid by developers – and, ultimately, homebuyers – we should be concerned with the long-term operations of the facilities they produce.

Wouldn’t that be an interesting analysis to perform?  Calculate the added costs of running all of those capital improvements:  the new park; the new community center; the new library; the new police and fire stations.  Who pays for those costs?  My guess, as said, it is the new residents – whether up front in the capitalized cost of the new facility or through some ongoing fee.  But, you could be footing the bill.

Most of the cost goes to pay all the new workers.  For the police and firefighters, I guess that’s okay.  But, what about for the new park?  How many salaries and benefits do we pay?  Or, the community center?  Do we pay the health care of those individuals?  Do we cover the retirement benefits of the library employees?

Plus, what’s coming down the pike?   What new costs do all the new laws – nearly 3,000 every year generated by the Legislature and the Governor – hold in store for state taxpayers?  How many new government positions had to be filled with the passage in 2008 of SB 375, for example?  We know the new law calls for a lot of regulation – in Sacramento and statewide – so it’s probably a sizeable number.

And, how do we know what government really has to do (to implement the law) when the bureaucrats are seemingly using code to explain what has to be done?  Check out what some of the implementation instructions that go along with SB 375:

SB 375 passed in September 2008, and CARB finalized the regional greenhouse gas emissions reduction targets in April 2010.  Then MPOs began to work on their greenhouse gas quantification methods and once their method was approved by CARB, they began to create their SCS. While MPOs were working on their SCS, DOF and HCD sent MPOs their RHNA letter containing the number of new housing units needed to accommodate growth at each income level.  Then MPOs developed RHNA methods, which needed approval from HCD.  Most MPOs adopted their SCS and their Regional Housing Needs Plan around the same time, since they are required to be consistent.  However, once the RHNA is distributed to cities, cities have eighteen months to update their Housing Elements, and three years to rezone.  This means that in most MPOs, local plans consistent with the SCS were not required to be in place until a decade after SB 375 passed.

I know what that says – and I trust there are ample bureaucrats in Sacramento and beyond who know what it means – but how does a normal person (i.e. taxpayer) decipher this gibberish?  Not many do.  They just dutifully pay the freight when it comes due each April 15.  To be sure:  it’s certain we taxpayers are on the hook for the millions of dollars for this new law – which after 10 years has not yet been implemented – and thousands more like it every year.  And, we proudly call this the law of the land?

Indeed, as taxpayers we are accountable for all government expenses.  So, why not the bureaucrats?  Why can’t some kind of notice be given to state taxpayers every year, for example, just as these new costs are to be imposed?  There is more than enough time between when session ends the previous summer and the following January – when these new laws take effect – to itemize them and tell us how much each new one is going to cost to implement.  It’s either that or allow lawmakers to run free – spreading new costs everywhere.

You can bet that without some sort of check, they will continue their bad habits.  We shouldn’t let that happen.  Hold them accountable.  Make them earn our trust.

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