Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

POLS 207 > Chapter 4: Finance > Flashcards

Chapter 4: Finance Flashcards

1
Q

Rainy day fund

A

Money put aside by a state or local government to be used during bad economic times

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

The Budget

A

The most important policy statement of ANY government. Also known as an appropriation bill.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

budgeting is a zero-sum game

A

If one thing gets more money, something else must lose money

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Revenue

A

Income received by the government. Most of it is from taxes

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Expenditure

A

Goods and services purchased or provided with government funds. Provides public goods and merit goods.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Merit goods

A

Things society believes they shouldn’t pay for (such as education)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Public goods

A

Goods and services for the public provided by the government.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Earmarked funds

A

Certain revenues reserved for certain programs

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

General Fund

A

Money that isn’t already earmarked. The “discretionary” part of spending.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Uncontrollables

A

Funds that are already committed. Pre-existing commitments.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Federal budget

A

$6.13 trillion (2023). $1.69 trillion deficit.
Uncontrollables: interest on national debt. Social security and other
income entitlements. Healthcare entitlements.
Discretionary Spending: Defense, non-defense domestic

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Federal budget uncontrollables

A

interest on national debt. Social security and other
income entitlements. Healthcare entitlements.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Texas Budget

A

Biennial. $321 billion. Health and Human services, Education, and Law Enforcement are the biggest spenders.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Balanced budget

A

States can’t spend more than they make in revenue. Texas Constitution requires a balanced budget, except for in EXTREME cases.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

How is a budget balanced?

A

Appropriations must be <= forecasted revenue + revenues gained and not spent.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Why balanced budget is not straightforward

A

The budget can be wrong
The plan can be incomplete
The plan can use “accounting tricks”
The plan can be “shifted”
Balanced budget DOES NOT mean NO debt.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

Agenda-setting (Budgets)

A

State budgets are an important way to declare the political agenda of the next fiscal year.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

Line-item veto

A

The chief executive (president/governor) can veto parts of a bill, but not the entire thing. For example, the Texas governor can veto parts of the next year’s budget. It is unconstitutional for the president. The governor of Texas CAN do it.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

Legislative Budget Board (LBB)

A

Develops budget and policy recommendations for legislative appropriations, completes fiscal analyses for proposed legislation, conducts evaluations and reviews to improve the efficiency and performance of state and local operations, and adopts constitutional and statutory spending limits. Unlike most states, who has the governor create legislative appropriations.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

Governor’s Office of Budget, Planning, and Policy (GOBPP)

A

Provide budget instruction, review Budget, hold public hearings, take budget recommendations. Part of the executive branch, and answers to the governor.

21
Q

Comptroller

A

The chief financial steward of Texas. The Comptroller’s office receives, disburses, counts, safeguards, records, allocates, manages and reports on the state’s cash

22
Q

Chapter 4: Finance Objectives

A
  1. Explain what taxes generate revenue to the states.
  2. Discuss why taxing varies between state and local governments.
  3. Describe the budget process and restraints on budgeting.
23
Q

Balanced budget

A

A budget in which current expenditures are equal to or less than income.

24
Q

Bonds

A

Certificates that are evidence of debts on which the issuer promises to pay the holders a specified amount of interest for a specified length of time and to repay the loans on their maturity.

25
Q

Budget deficits or shortfalls

A

Cash shortages that result when the amount of money coming into the government falls below the amount being spent.

26
Q

Budget process

A

The procedure by which state and local governments assess revenues and set budgets.

27
Q

Capital investments

A

Investments in infrastructure, such as roads.

28
Q

Discretionary spending

A

Spending controlled in annual appropriations acts.

29
Q

Dividend

A

A payment made to stockholders (or, in Alaska’s case, residents) from the interest generated by an investment.

30
Q

Entitlement

A

A service that government must provide, regardless of the cost.

31
Q

Excise or sin taxes

A

Taxes on alcohol, tobacco, and other similar products that are designed to raise revenues and reduce use.

32
Q

Expenditures

A

Money spent by government.

33
Q

Fiscal federalism

A

The system by which federal grants are used to fund programs and services provided by state and local governments.

34
Q

Fiscal year

A

The annual accounting period used by a government.

35
Q

Focused consumption taxes

A

Taxes that do not alter spending habits or behavior patterns and therefore do not distort the distribution of resources.

36
Q

General obligation bonds

A

Investments secured by the taxing power of the jurisdiction that issues them.

37
Q

Income taxes

A

Taxes on wages and interest earned.

38
Q

Intergovernmental transfers

A

Funds provided by the federal government to state governments and by state governments to local governments.

39
Q

Municipal bonds

A

Bonds issued by states, counties, cities, and towns to fund large projects as well as operating budgets. Income from such bonds is exempt from federal taxes and from state and local taxes for the investors who live in the state where they are issued.

40
Q

Progressive tax system

A

A system of taxation in which the rate paid reflects ability to pay.

41
Q

Regressive taxes

A

Taxes levied on all taxpayers regardless of income or ability to pay, placing proportionately more of a burden on those with lower incomes.

42
Q

Revenue bonds

A

Investments secured by the revenue generated by a state or municipal project.

43
Q

Revenues

A

The money governments bring in, mainly from taxes.

44
Q

Sales taxes

A

Taxes levied by state and local governments on purchases.

45
Q

Severance taxes

A

Taxes on natural resources that are removed from a state.

46
Q

Tax burden

A

A measurement of taxes paid as a proportion of income.

47
Q

Tax capacity

A

A measure of the ability to pay taxes.

48
Q

Tax effort

A

A measure of taxes paid relative to the ability to pay taxes.

49
Q

User fees

A

Charges levied by governments in exchange for services. Such fees constitute a type of hidden tax.

POLS 207 (9 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions