“As state legislators kicked off their 2022 sessions this spring and started planning new budgets, many found that their tax coffers were overflowing. What lawmakers do with that extra money could have long-range consequences.
The excess revenue resulted from a convergence of two windfalls. State tax collections rose sharply in 2021 as the pandemic waned, businesses fully reopened, and consumers started spending again. And the federal government showered states with more than $360 billion as part of the $1.9 trillion American Rescue Plan, passed in March 2021. The passage of President Joe Biden’s $1 trillion infrastructure bill means even more federal taxpayer money for state treasuries in the near future.
All told, state revenues (including federal funds) increased by more than 12 percent in 2021, according to data from the Pew Charitable Trusts. Thirty-two states reported higher than expected revenue in 2021, according to the National Association of State Budget Officers.
As a result, many states now have significant year-over-year budget surpluses for the current year. California leads the way with a $31 billion surplus—an amount larger than many states’ entire annual budgets. Florida ($11.2 billion surplus), Maryland ($4.6 billion), Minnesota ($7.7 billion), and Virginia ($2.6 billion) also have large cash reserves. But state lawmakers should be careful about letting the extra dough burn a hole in their pockets.
“It’s understandable that there is all this pent-up demand for different kinds of new programs or tax cuts,” says Josh Goodman, a senior officer with Pew’s state fiscal health initiative. The impulse to use surpluses for pet projects, Goodman says, ignores data that suggest many states are running long-term structural deficits—largely due to pension obligations and health care costs in programs like Medicaid. “The question is not just what’s the budget situation this year,” Goodman says, “but what is the budget -situation going to be five or 10 years down the road.””
“The case is Federal Election Commission v. Ted Cruz for Senate, and it involves a federal law intended to prevent campaign donors from putting money directly into the pockets of elected officials. Specifically, the law permits candidates to loan money to their own campaigns, but forbids the campaign from repaying more than $250,000 of that loan from funds raised after the election takes place.
Typically, federal law draws a sharp line between money donated to a campaign, which can only be spent on the election effort, and money given directly to a candidate, which is ordinarily not allowed. But loan repayments exist in a gray area between these two kinds of donations. Yes, money repaid to a candidate ostensibly just reimburses that candidate for money they fronted during the campaign. But any dollar given by donors to repay such loans still goes into the pocket of a former candidate who may very well be a powerful elected official by the time they receive the money.
Without a cap on loan repayments, elected officials with clever accountants could profit off of their donors. In 1998, for example, Rep. Grace Napolitano (D-CA) made a $150,000 loan to her campaign at 18 percent interest (though she later reduced that interest rate to 10 percent). By 2009, she’d reportedly raised $221,780 to repay that loan, meaning that she earned at least $71,000 in profits.
Thus, should this challenge to the repayment cap succeed — and it appears overwhelmingly likely to succeed — elected officials could potentially make enormous loans to their campaigns at high interest rates, and then use those loans as a vehicle to accept bribes from lobbyists and other donors who want to trade money for access to the official.”
“Now that President Joe Biden has signed the Infrastructure Investment and Jobs Act (also known as the bipartisan infrastructure framework, or BIF) into law, the federal government faces a new challenge: getting the funds out to states and cities.
In the coming months — and years — federal agencies will distribute billions of dollars for everything from bridge repairs to public transit expansions to bike paths. Most of this money will go directly to state governments, which will have significant discretion over which projects they’d like to fund.”
“Campaign money flows to those holding power or those positioned to do so, and those in the lobbying business are incentivized to play up their role in facilitating it. But corporate America’s potential embrace of the congressional GOP is notable for what preceded it. Following the Capitol riot on Jan. 6, many top corporations vowed to withhold their political donations to the Republican lawmakers who objected to the certification of Joe Biden’s electoral college victory, which includes members in the House GOP leadership ranks. Comcast, Mastercard, American Express and others announced they would not give to those lawmakers; others suspended political contributions entirely.”
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““Where we are today from where we were six to eight months ago is a fundamentally different political environment,” said David Tamasi, managing director of Chartwell Strategy Group and a lobbyist with ties to former President Donald Trump. “I think people are realizing that you know it’s likely that the House is gonna flip, and that you’re gonna have to engage with some of the folks that are going to have greater political profiles than they did previously.”
For those on K Street, corporate PAC donations serve as a key tool for access and favors. And the decision to withhold donations vexed GOP lawmakers, two Republican lobbyists said. Additionally, GOP lobbyists at major companies have grown frustrated with expectations that they are supposed to deliver results for their businesses while unable to give to those members who objected to the results of the election, according to one K Street insider. The same lobbyist speculated that the GOP’s frustration with the business community over the lack of donations could cause the party to be less amenable to corporate interests.”
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““I think they’ll want to figure out how to repair relationships with people that hold gavels and hold chairmanships that are important,” Geduldig said.”
“”Not only was my stuff taken without just cause…It was taken by my own government, and they were asking me to prove my innocence and subject myself to an investigation to get my stuff back, which was unlawfully taken to begin with, and had no evidentiary value.”
Perhaps most pitiful is that the Snitkos are two of the lucky ones in this story. That word feels ill-fitting for anyone in their shoes. But while the FBI has acquiesced to giving select deposit boxes back, including the one owned by the Snitkos, they are refusing to surrender others, seeking instead to keep a collective $85 million in cash and an unspecified amount of gold, silver, and precious metals from unsuspecting people.
That includes Travis May, who stored gold and $63,000 in cash, and Joseph Ruiz, who had $57,000 in his box—his life savings, which he uses to pay his living and medical expenses, according to a recently amended lawsuit.
“After the government seized this property on March 22, 2021, [Ruiz] filed a claim with the FBI to retrieve it,” notes the complaint from the Institute for Justice (IJ), a libertarian public interest law firm representing both men. “However, the government has informed attorneys for USPV that it intends to civilly forfeit Joseph’s property. At this time, the government has not provided Joseph with any notice of the purported civil forfeiture proceeding.””
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“Should the government succeed, plaintiffs Jeni Verdon-Pearsons and Michael Storc, for instance, will forcibly donate their silver, though the suit notes that they, too, have not been provided with “the factual or legal basis for the purported civil forfeiture proceeding.””
“Bloomberg’s contribution appears to rely on the campaign finance loophole allowing campaigns to transfer unlimited funds to party committees in an election year.
As an individual, Bloomberg is only allowed to contribute approximately $35,000 a year to the DNC. But he can transfer unlimited money to his own campaign, which in turn can transfer an unlimited amount of funding to the party.”
“As part of an overall plan to divert $3.8 billion from the Pentagon to pay for the construction of a wall on the border with Mexico, President Donald Trump is planning to drain about $1.6 billion from the slush fund that pays for much of America’s post-9/11 wars in the Middle East.
Foreign Policy’s Lara Seligman reports that the White House sent a memo to Congress on Thursday outlining plans to redirect military spending for the border wall. The administration plans to move $2.2 billion originally earmarked for purchasing vehicles, ships, and aircraft into an anti-drug trafficking program that has already been tapped to provide for wall construction costs. The other $1.6 billion in border wall funding will come from the budget used to pay for America’s foreign wars”