It may not be Halloween, but who wants to hear a scary story?
Eighty-three percent of federal revenues are acquired via personal income taxes and deductions. Forty-eight percent of federal revenue comes from individual income taxes, while the other 35 percent account for the payroll deductions that fund social insurance programs including Medicare, Medicaid, and Social Security.
There’s an extra 9 percent in there for corporate income tax to round off the “income tax” as a revenue source bracket – which brings our total to 92 percent. The remaining 8 percent is a huge smattering of revenue sources.
For some, those paragraphs alone are probably a little scary, but it gets better.
Our story begins with Jim – please note that Jim is not (technically) real, simply a representation of the average person in Livingston Parish. Jim makes just over $57,000 per year (Livingston Parish median income) which means he will pay, roughly, $11,816 in taxes broken down thusly:
-Federal income tax: $5,840.
-State income tax: $1,616.
-Social Security: $3,534.
Jim has had a run of bad luck in the past four years.
His home flooded in the Great Flood of 2016; a large subdivision is being added to the back of his older neighborhood; his property doesn’t drain properly as the new homes are being built 3 to 4 feet higher than his current elevation; he sits in 90 minutes worth of traffic every day to reach his job in Baton Rouge; and, to make his microcosm of life a little worse, two of his tires blew out in a large pothole that formed along the road to his neighborhood because water cut a hole in the substructure.
Jim is upset because, while Jim has a relatively enjoyable life, some of the basic day-to-day conveniences – as well as some large-scale issues – simply aren’t adding up.
Jim reads The News and notices that there are plenty of local representatives and politicians working to solve his problems as best and quickly as they can. Jim, being relatively astute and observant, notices a word used very often – grants.
Jim notices that for just about any street, road, and drainage project in the area a grant had to be acquired – from either the federal or state level – to make the project a go. Jim goes on to notice that if a grant is not affected, and higher-level, direct dollars from the state or federal government don’t come available, the project doesn’t start.
Finally, Jim notices – through government budget analysis – that in order to remain high on the list of grant approvals the local governmental entities must save – not spend – cash in order to have their match ready and receive high marks for their grant applications.
Jim realizes that his dollars not only are earmarked by state and federal governments for their use but are then shifted through bureaucratic morass before returning to the place they came to be used only for specific purposes … that is, if the grant is approved.
Jim screams in terror.
The economy of grants has painted local officials into a tight corner. High taxes and relatively average incomes have provided a nominal parishwide income that requires patience for the parish and municipalities to get the most bang for their buck – that is, holding onto “matching funds” (cash) in order to capitalize on high-return grants.
Much like the situation the Livingston Parish School Board faced after the flood, in waiting for FEMA to make its designations on three schools so the board didn’t have to pay completely out-of-pocket for the repairs, local governments’ grant acquisition is the responsible thing to do from a financial standpoint.
It stretches the taxpayer dollar further.
However, for taxpayers, having to pay in those amounts – even after President Trump’s tax cuts – and waiting, usually for 2 to 3 years, turns into a horror story in and of itself.
Especially when the parish they live in continues to grow at the rate of 100 or so houses per month but lacks the infrastructure to sustain such a population.