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Wednesday, June 23, 2010

When budget cuts cut the wrong way

It's easy to say, "cut spending" but difficult to do effectively. Stateline.org has an interesting article about state budget cuts backfiring. Often the political decision is "cut across the board" but what if you are cutting positions that bring money into state coffers? That appears to be the case in some states.

"For example, 5,300 employees of the Franchise Tax Board have been told to take three days off work each month rather than spending that time auditing delinquent taxpayers and collecting back taxes. For every dollar it has saved by furloughing these workers, the state has lost $7.15 in uncollected revenue, according to a report by the California Senate Office of Oversight and Outcomes. The decision to keep these workers off the job could reduce the overall projected savings of the furlough program by more than one-quarter, according to the report."

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