Everyone demands something from the state budget: pensioners want increased benefits, public employees want higher salaries, those who are disadvantaged want adequate social assistance, and everyone else wants services such as free health care and education. Not many people think about who has to pay for these items. In the country of Georgia, much like elsewhere, a taxpayer is not only a worker or an employer, but rather any consumer in the economy, and therefore virtually everyone pays.
What is the price of running a state? A new web tool from the Economic Policy Research Center is designed to answer that question for Georgia. The Price of the State provides data such as the country’s budget size, tax revenues, debt, taxpayer contributions to health care and education, and salaries of government officials. Users can view budgetary expenditures on a per capita basis, indicating the real “state burden” for each citizen.
As of 2013, state expenditures for Georgia exceeded 8 billion lari per year, or about 4.7 billion dollars. This translates into a 2,134 lari price tag per person annually. Given the low number of individuals who are employed (about 662,000; roughly 14 percent of the population), not taking into account the self-employed, the tax burden runs as high as 13,203 lari per year per employed individual. The most expensive items include pension provision and road infrastructure, at 231 lari per capita each. The least expensive include financing the public broadcaster (only 6 lari per year), and aid to internally displaced individuals (9 lari per year).
The bill for government services shows users how much the state “overspends,” which results in a budgetary deficit. For 2013, 82 percent of expenditures are planned to be financed through tax and non-tax revenues; the remaining 18 percent will be financed through borrowing, privatization, and other inflows such as increasing domestic and foreign debt. This year the state debt will increase by 193 lari per person, for a total of 2,136 lari per capita.
This receipt allows ordinary people to see where their taxes go and how much they contribute toward public services. At the same time it provides information on deficit spending and growing public debt. The tool allows everyone to calculate, for example, how much taxes would need to increase per capita if pensions were to rise by 10 percent.
The site also offers a number of games. In “Buy Your Own State,” users can “shop” at a virtual store, choosing which services they want from their own “personal” state and which they would not pay even a single tetri for. The price of the user’s state is calculated and compared with that of the actual country.
“What Do You Pay?” calculates how much a person pays for state-provided services. After entering information on monthly gross income and expenditures as well as monthly costs for housing, fuel, and other expenses, the tool indicates how much of an eight-hour day the user works for him or herself and how much for the state.
The capacity to concretely understand the budgetary processes and priorities of the government is a necessary step towards a more politically engaged citizenry and a more accountable government.
Find out more by visiting The Price of the State website.