In preparing a balanced budget, the first option in making ends meet should be finding new sources of revenue before considering an increase in taxes. And, yet, raising taxes is almost a spontaneous reaction any time a budget gap is discovered – or even suspected.
At three+one®, we believe tax increases should only be levied as a last resort, not as the starting point.
Before a tax increase is even considered, can you, as a conscientious public official, say unequivocally that you’ve implemented every source of cost savings or new avenues of untapped revenue?
I estimate that nationally at least $500 billion of public cash is underperforming at marketplace rates. These dollars are either being kept on the sidelines for “just-in-case” expenditures or being left dormant since cash is considered to be a low-value asset. In many cases, this cash is being left in bank accounts with such little attention it may as well be invisible.
Just consider if the average yield on a public deposit was 2.0%. On a national basis, that equates to over $10 billion in new revenue for public entities. Let me repeat that: $10 billion per year of new revenue.
The revenue an entity can earn on all cash is no small amount. It’s generally enough to cover budget gaps, offset tax increases, or even enable offering tax rebates. I could go on and on. cashvest® by three+one® provides liquidity analysis and time horizon data that identifies and allows an entity to capture the full marketplace value on “all” cash.
Bear this in mind: the money public entities handle is not really their money; it belongs to the taxpayers.
Realizing the value of all cash is the first option one should consider before an entity even considers raising taxes.
Let cashvest® by three+one® help you put your cash to work.