A Missouri House member claims his review of the Department of Revenue uncovers up to $36 million in savings for state taxpayers.
St. Louis Republican David Gregory says he spent more than six months conducting interviews and compiling data for what he’s called a “Fiscal Opportunity Audit”.
Gregory gained experience performing specialized audits while working for a global consulting firm, where he would look for ways to re-manage, re-structure or otherwise find savings for Fortune 500 companies. If his firm’s recommendations were implemented, it would receive a percentage of the money it saved.
The 2016 Freshman Legislator of the Year in the Missouri House recently presented the results of his state government audit before the House Budget Committee. One of the findings in his examination mirrors a component in Governor Eric Greitens tax plan which would do away with a 2% discount businesses receive when they report sales taxes on time.
Gregory is not suggesting the state repeal the discount, but instead, cap the current unlimited rate at $3,000 per month. He says doing so would save the state $13.4 million.
Another area Gregory looked at was supply and equipment costs. He thinks a closer examination will reveal whether the expenses are justified, or if department managers are simply spending their full allocation of money so they don’t risk losing funds in future budgets.
So far, he’s identified roughly $1 million in excess spending among several departments. Further, Gregory is recommending the state implement a centralized training system to handle discrimination, harassment and diversity issues instead of continuing the current arrangement where departments are duplicating the very same programs.
He would also like to see the state invest in hiring more investigators to look for tax evasion schemes on the part of businesses and members of the public. Gregory says there’s evidence that the extra money spent on additional investigators would be more than offset by increased revenue collections.
In further examination of the Department of Revenue, Gregory benchmarked Missouri’s performance to other states. He found that the Indiana Department of Revenue, which serves 500,000 more residents, collected $2 billion more in taxes, and did so with 300 fewer employees.
Gregory thinks if Indiana can operate with such comparative efficiency, then Missouri should examine whether it really needs that many more employees in the Department, although he says he’s not endorsing a sweeping cut of 300 workers.
Before the House Budget Committee, Gregory says his audit was extremely well received and there’s talk about expanding his efforts. “They’re thinking about even forming a task force or a committee for me to help fund, and start to scale this across other departments,” said Gregory.
There is no current piece of legislation attached to his audit and Gregory says his intention is not to offer a policy proposal with his findings. “This is not that,” Gregory said. “This is simply looking at it, saying ‘Hey, how do we operate more efficiently and save money so that we have more to argue about where we can spend elsewhere’.”
The former accountant turned attorney thinks it’ll be necessary to have widespread support to force the adjustments to save the $36 million he’s found, given that state agencies have been conducting business the same way for 50 years.
Gregory says members of both the House and Senate as well as the governor’s office will need to be on board to move forward. “It really is a joint effort,” said Gregory. “It’s hard to accomplish this successfully individually. So, if we can just get everybody on board and have everyone understanding, I think we can really get some great things done for the state of Missouri.”
According to Gregory, two appointees Governor Eric Greitens made to the Department of Revenue – Director Joe Walters and Chief Operating Officer Ken Zellers – have been especially receptive to his efforts.