After looking over and studying the data collected, and the financial calculations performed on the data, a decision should be made as to how much of a financial safety margin is needed to provide a cushion against the potential for down-turns in the economy.
Under normal operating conditions, the money collected as part of this safety margin would be set aside and not spent or loaned out.
When there is a downturn in the economy that results in a drop in the amount of transparent taxes being collected, then these safety funds that would have been kept in reserve are called upon and used.
The purpose for using the reserve funds is to give taxing authority management time to plan how to respond to the economic downturn without an immediately negative impact on currently funded projects or operations. Using these reserve funds buys time to gradually reduce spending levels if that is what is needed.
Thank you for taking time to read and ponder my opinion on this topic.
An Opinion Article by Dave Kemper
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It has been said that: "One definition of insanity is to do the same thing, the same way, over and over and over again, each time expecting to achieve a different result."
Therefore, we must either CHANGE the way we live, or we bind our future to our past as if with CHAINS.
"I do not consider myself to be better than anyone else. But I do believe in exercising my right to not stay stupid."
David W. Kemper, Author
© Copyright 2014 by David William Kemper. All right reserved
No part or portion of this publication may be modified in any manner without the express written permission of the author. Quoting from this publication is allowed on condition that the name of the author and the name of the publication are included.
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