Chapter 13 Government

Dual budgeting system

The compilation of separate budgets by the legislative branch and the executive branch.

What is the largest source of tax revenue for the state of Texas?

The general sales tax is the state's largest source of tax revenue.

Regressive Tax

The less you make, the more the government takes. Texas tends to favor this.

Progressive tax

The more you make, the more the government tales.

Budget execution

The process whereby the governor and the Legislative Budget Board oversee and in some instances, modify, implementation of the spending plan authorized by the Texas legislature.

What is the stated purpose of the Rainy Day Fund?

The rainy Day Fund is to be used when the state faces an economic crisis

Legislative Budget Board (LBB)

A 10-member body co-chaired by the lieutenant governor and the Speaker of the House. This board and its staff prepare a biennial current services budget. In addition, they assist with the preparation of a general appropriation bill at the beginning of a regular legislative session. If requested, staff members prepare fiscal notes that assess the economic impact of a proposed bill or resolution.

Balance budget

A budget in which total revenues and expenditures are equal, producing no deficit.

fee

A charge imposed by an agency upon those subject to its regulation.

Payroll tax

An employer-paid tax levied against a portion of the wages and salaries of workers to provide funds for payment of unemployment insurance benefits in the event employees lose their jobs.

Severance tax

An excise tax levied on a natural resource (such as oil or natural gas) when it is severed (removed) from the earth.

True or False: IF a student entering a university choose a fixed-rate tuition plan, the student's tuition will never increase.

False. Fixed-rate tuition is only in effect for four years. If a student has not graduated within that time, tuition increases to the current rate.

True or False: Tuition deregulation results in lower tuition at the state's public colleges and universities.

False. Since tuition deregulation, student tuition has risen an average of 90 percent over 2003 levels at public colleges and universities.

Why did universities in Georgia and Michigan stop offering fixed-rate tuition plans?

Georgia and Michigan abandoned fixed-rate tuition plans because the respective state government's support for higher education decreased and the cost of continuing the programs was too expensive for universities.

What three programs provide health insurance for Texas children?

Health insurance is provided to Texas children through Medicaid, CHIP, and ChildLINK.

General Revenue Fund

Money that can be appropriated of any legal purpose by the legislature.

Grant in aid

Money, goods, or services given by one government to another (for example, federal grants-in-aid to states for financing public assistance programs).

Texas Grants Program

"Toward Excellence, Access, and Success" is a college financial assistance program that provides funding for qualifying students

What is a fiscal year?

A fiscal year is a budget year. In Texas, it begins on September 1 and ends on August 31 of the following calendar year.

Rainy Day Fund

A fund used like a saving account for stabilizing state finance and helping the state meet economic emergencies when revenue is insufficient to cover state-supported programs.

Tax

A mandatory assessment exacted by a government for a public purpose.

"Robin Hood" plan

A plan for equalizing financial support for school districts by transferring tax money from rich districts to poor districts.

Budget

A plan of financial operation indicating how much revenue a government expects to collect during period (usually one or two fiscal years) and how much spending is authorized for agencies and programs.

ChildLINK

A program administered by the Texas Attorney General's Child Support Division in which medical support payments from noncustodial parents are used to provide insurance for their children.

Children's Health Insurance Program (CHIP)

A program that provides medical insurance for minimal premiums to children from low-income families.

Sin tax

A selective sales tax on items such as cigarettes, other forms of tobacco, alcoholic beverages, and admission to sex-oriented businesses.

Texas has a dual budgeting system. What does this mean?

A state with a dual budgeting system requires both the executive branch and the legislative branch to prepare and submit proposed budgets to the legislature. In Texas, both the governor and the Legislative Budget Board submit proposed budgets.

Selective sales tax

A tax charged on specific products and services.

Franchise tax

A tax levied on the annual receipts of businesses that are organized to limit the personal liability of owners for the privilege of conducting business in the state.

Revenue bond

Amount borrowed by the state that is repaid from a specific revenue source.

General obligation bond

Amount borrowed by the state that is repaid from the General Revenue Fund.

service sector

Businesses that provide services, such as finance, health care, food service, data processing, or consulting.

Fiscal policy

Public policy that concerns taxing, government spending, public debt, and management of government money.

The state of Texas has one of the highest sales tax rates in the nation. It does not have a state income tax. Is Texas's tax structure an example of a regressive or a progressive tax system?

Texas has a regressive tax system, which means that poor people pay a higher percentage of their incomes in taxes than do wealthier residents.

What are three characteristics of Texas's fiscal policy?

Texas requires a balance budget, favors low taxes, and spends at low to moderate levels.

General sales tax

Texas's largest source of tax revenue, applied at the rate of 6.25 percent to the sale price of tangible personal property and "the storage, use, or other consumption of tangible personal property purchased, leased, or rented."