Friday, August 17, 2007

Interesting column by Senator Ted Kanavas

Sometime we should have a discussion here about trying to set the appropriate amount of deductions so you don't loan the government "free money". But if you're looking for another reason to time your deductions, read the following:

When It Comes To Taxes, Governor Doyle Says “Pay Me First”
By State Senator Ted Kanavas

We already know the Governor is interested in getting more of your tax dollars. His budget proposal for the next two years included new taxes and fees, as well as tax and fee increases on almost everything we come in contact with during our daily lives. Our houses, our cars, things we buy on the Internet, the Governor wants more of your money for these things and others to pay for his expensive, big-government plans. There is no end in sight for his ability to spend our hard-earned money.

In the past, though, you could at least count on the Governor to give you your money back when he owed you some. Apparently, that changed when the Governor got re-elected last fall. For the first time in recent history, the Governor’s Department of Revenue decided to process income tax returns where the taxpayer owed money before the returns where the taxpayer had paid too much and deserved a refund.

From the number of calls my colleagues and I got from people who did not get their refunds on time, this was more than an isolated incident. The Journal-Sentinel recently reported that the Department processed hundreds of thousands of returns from people who owed taxes before processing ones from people who were owed refunds.

In past years, the Department has processed refunds first. By mid-July, the Department had processed more than 289,000 returns from people who owed taxes, compared with about 170,000 such returns at this point last year, records show.

Why is this tardiness a problem? First of all, taxpayers count on getting these refunds in a timely fashion. People on fixed incomes cannot afford to wait an extra month for their already limited funds to be returned to them. I heard from several seniors that were put into serious financial difficulty because the Governor took his time sending them their money back.

The Governor’s Department of Revenue should not be holding onto money that doesn’t belong to it. To make sure Revenue gets the refunds out in a timely manner, we passed a law that requires refund checks issued after July 17th to include 9% interest. This longstanding deadline had no effect on how the Department handled tax returns this year. To make matters worse, Governor Doyle has no idea how much his new “pay me first” policy cost the state in tax revenues, according to published reports.

What we do know is that in addition to holding up people’s refunds unnecessarily, this new policy wastes money paying interest to taxpayers unnecessarily. I support the government giving us more of our money back, I just don’t want to see it happen because administrative inefficiency and/or incompetence causes the Department to miss deadlines that were clearly set before the process started.

As long as we are talking about inefficiency that borders on incompetence, the Department has no idea how much it paid in overtime to catch up on the backlog. So, the Governor wasted money coming and going when it comes to giving us back our own money.

Who is responsible for this? According to the Department, multiple mid-level employees are responsible for this costly problem. Who is getting disciplined for this needless waste of taxpayer money? No one, according to the person in charge. The Governor must think he has enough of your tax money to cover a little waste.

It isn’t like the Department was expected to do something out of the ordinary here. The Governor and the people who run the Department of Revenue decided that this year, for the first time, the taxpayers did not come first. The first year after the Governor got re-elected; he decides that it is more important for him to get paid than it is for hard-working taxpayers to get their money back. I wonder how that would have gone over before people had to decide who to vote for last November.

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