On Tuesday, June 29, BC's Public Accounts became available for the fiscal year ended March 31, 2004. They include the audited financial statements that are one of the most important disclosure documents for government. They were accompanied by political spin from Finance Minister Gary Collins which the Vancouver Sun carried the next day as a headline story without critical analysis. What is buried in the public accounts is evidence that the Campbell tax cuts failed to pay for themselves, and a tax grab of $903 million was made through tobacco, fuel and property purchases taxes. That is in addition to $400 million per year that was raised through the increase in MSP premiums. That's not an economic success story. That is a lesson in shifting taxes from one source to another.

The public accounts make it possible to compare actual outcomes with initial government plans. Collins presented his first full budget to the legislature in February 2002. That was after a mini-budget in July 2001 where he added to the $1.5 billion per year in personal income tax cuts by announcing corporate tax cuts that were projected to total $790 million per year by fiscal 2003-04. In his first full year budget, Collins included, as he is required to do, the plan for the next two fiscal years. In February 2002 his plan for fiscal year 2003-04 was to raise $13.062 billion in tax revenue. The public accounts just released show that $13.808 billion was raised in tax revenue. Where did the unexpected $746 million come from? Is this evidence that the tax cuts paid for themselves?

The original plan for 2003-04 projected personal income tax revenues of $5.159 billion for 2003-04; the audited statements show they came in at $4.878 billion - a shortfall of $281 million. The original plan projected corporate income tax revenues of $793 million; the audited statements show they came in at $776 million - a shortfall of $17 million. The original plan projected sales tax revenues of $3.982 billion; the audited statements show they came in at $4.001 billion - $19 million more than expected. The original plan projected property tax revenues of $1.454 billion; the audited statements show they came in at $1.576 billion - $122 million more than expected. Totaling the difference between the plan and the audited statement for personal income tax, corporate income tax, sales tax and property tax shows a shortfall of $157 million. That means that that total tax revenues not only came in $746 million higher than what was planned, but that the remaining taxes also had to cover the $157 million shortfall in the highest yielding taxes.

The audited financial statements show tax revenue from the other taxes as $2.577 billion. The original plan called for $1.674 billion. The difference of $903 million accounts for the increase in total tax revenue. That increase came from fuel taxes, tobacco taxes and property purchase taxes. Instead of having the tax cuts pay for themselves, they were offset by gouging on other forms of taxation.