Term
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Definition
| congress regulates the states by "do this or else" punishible by jail or fines |
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Term
| examples of dirct orders (2) |
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Definition
| Equal Opportunity Act of 1982 (barred discrimination) & marine protection amendment of 1977 (banned dumping sewage into ocean) |
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Term
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Definition
| where the federal government imposes conditions on the states in order for them to receive funding. Usually deals with transportation. |
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Term
| examples of crossover sanctions (3) |
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Definition
| speed limits, car seats, seat belts |
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Term
| cross-cutting requirements |
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Definition
| a condition on federal grant money and is extended to all programs regardless of source. |
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Term
| examples of cross-cutting requirements |
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Definition
| (example Title VI of the Civil Rights Act of 1964 which bars discrimination by those facilities receiving federal funding, also seen with academic loans and grants) |
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Term
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Definition
| federal government preempt functions by state and local government |
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Term
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Definition
| which requires states to do it even if no money is given – some give states an option to participate, but if a state chooses not to do the national government steps in and runs the program (unfunded mandates) |
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Term
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Definition
| preemption is the fed government, under the supremacy and commerce clauses of the Constitution, can preempt entire functions performed by state and local gov, since 1965, such as consumer product safety, workplace safety |
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Term
| 2 major issues of a entire preemption |
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Definition
states rights
&
Saves States money |
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Term
| UMRA – Unfunded Mandates Reform Act of 1995 |
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Definition
| passed by congress which requires draft legislation to be analyzed as to what unfunded mandates might be imposed on other gov or the private sector |
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Term
| What topic is not allowed by UMRA |
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Definition
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Term
| an example of an unfunded mandate that was limited by UMRA |
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Definition
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Term
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Definition
| frees federal and state/local government from each others taxes |
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Term
| Economic Recovery Act of 1981 |
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Definition
| passed by the Reagan admin, encouraged economic growth through reductions in individual income tax rates – caused fewer revenue for states |
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Term
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Definition
| 2nd Reagan tax cut, reduced revenue by almost 9 billion, eliminated tax deduction of sales tax causing a rush in revenue in 1986, but a drop in 1987 |
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Term
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Definition
| charges a cost when a service is used |
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Term
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Definition
| (example: trash service) new trend – attached to everything |
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Term
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Definition
| started in CA in 1950s, add money to earmark tax for project |
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Term
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Definition
| allows Governors to reject certain parts of the bill without rejecting the whole thing |
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Term
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Definition
| 19 states – 1 budget passed, other states – multiple, Oklahoma 80-90, Arkansas (the max) – 350, most other states – 2-7 |
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Term
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Definition
| governments experiencing financial difficulty in some manner |
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Term
| What 3 things have caused govenments fiscal stess? |
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Definition
| 1) cutbacks from the federal gov, 2) politics increase services without raising taxes = deficits 3) bad fiscal management |
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Term
| What is Functional Index? Why is it a bad measure of fiscal stress? Give an example of why its a bad measure |
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Definition
| where you look at the services it performs, bad because not all places need some functions ex: Nichols Hills doesn’t need a hospital |
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Term
| Functional Performance Index |
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Definition
| compares non-common function and debt, allows you to compare cities of different size, population, etc. |
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Term
| What are other good measures of fiscal stress? |
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Definition
| medium family income, population change, and the city wealth index |
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Term
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Definition
| deals with the question of “should government be big or small” |
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Term
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Definition
| when the government steps in to prevent us from harm |
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Term
| Example of regulatory policy |
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Definition
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Term
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Definition
| grant certain firms a favored position |
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Term
| An example of competitive policy |
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Definition
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Term
| What two policy's are involved in allocation function |
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Definition
Regulatory Policy
&
Competitive Policy |
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Term
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Definition
| deals with the question of “how do we keep the economy stable while spending and raising money” |
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Term
| What two types of policy are involed in stabilization function |
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Definition
fiscal policy
&
Monetary policy |
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Term
| When economy is in a recession phase, the money supply needs to be ________, and then ________ when we are in a depression. |
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Definition
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Term
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Definition
| “Who should benefit?” distributive policies involve subsidies for special groups or pork. |
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Term
| 2 reason why distribution function (pork) is necessary for congress to survive |
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Definition
Helps with reelection bonds
Helps with effective legislation |
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Term
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Definition
| whether everyone should have goods or just some. |
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Term
| example of redistribution |
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Definition
| debt crisis $400,000 number |
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Term
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Definition
| looks at 2 person economy. borrowed from welfare economics. |
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Term
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Definition
| represents amount of preference you have for both apples & fig leaves. |
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Term
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Definition
| point where you’re happy but someone else isn’t worse off. Multiple pareto efficiency points. |
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Term
| Fundamental Theorem of Welfare Economics? What are the two conditions to make it work? |
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Definition
it is possible to reach pareto efficiency as long as producers and consumers act as perfect competitors and act under certain conditions:
• Consumer and producers must be price takers not makers
• A market exists for every commodity
o Basically it says if it works there should be no role of government in the economy |
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Term
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Definition
| one person’s behavior affects another person that’s outside the market. |
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Term
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Definition
| when individuals can’t solve the problem government can intervene. |
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Term
| Tax situation involving Bart |
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Definition
| Bart could be taxed to make up for the harm he is causing (piquorian) |
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Term
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Definition
| when a producer is producing too much or too little of a good. |
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Term
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Definition
| The government could pay Bart to produce less hot dogs |
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Term
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Definition
| government response to externality. Government makes a producer pay for their externality ex. Pollution, uninformed customers |
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Term
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Definition
| is the added gain each customer receives from an added purchase. |
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Term
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Definition
| the added cost each customer has from an added purchase |
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Term
| example of a marginal benefit not diminishing |
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Definition
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Term
| example of marginal benefit diminishing |
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Definition
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Term
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Definition
| The incremental (derivative) change in damage incurred by increasing levels of risk or decreasing levels of prevention with respect to some kind of harmful activity. Marginal damages are used to calculate optimal levels of damage, risk, and prevention. |
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Term
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Definition
| Someone who benefits from resources, goods, benefits, or services without paying for the cost of the benefit in taxes. Think of the conservative view on illegal immigrants. |
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Term
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Definition
| a public good is a good that is both non-excludable and non-rivalrous meaning that individuals cannot be effectively excluded from use and where use by one individual does not reduce availability to others. Examples of public goods include fresh air, knowledge, lighthouses, national defense, flood control systems and street lighting. |
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Term
| characterisics of externalitis (6) |
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Definition
1. Can occur from consumer to consumer (loud upstairs neighbor)
2. can occur from producer to producer (paper and pulp mill upstream from fishery)
3. can occur between producers and consumers (noise pollution from airport)
4. can be positive (R & D) or negative (pollution)
5. has some nonrival/nonexclusion characteristics
6. generally results in inefficient allocations |
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Term
| Ways to resolve externalities |
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Definition
Establishing property rights can restore efficiency
Coase Theorem
Mergers between producers or consumers.
Social Conventions – The Golden Rule
Taxes applied to production or purchasing the end product.
Subsidies granted to the produce to not produce. |
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Term
| Tiebout's response to externalites |
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Definition
| LEAVE! Vote with your feet and leave if possible |
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Term
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Definition
| if trade in an externality is possible and there are no transaction costs, bargaining will lead to an efficient outcome regardless of the initial allocation of property rights. In practice, obstacles to bargaining or poorly defined property rights can prevent Coasian bargaining. (More examples in the notes) |
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Term
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Definition
| Fiscal policy relates to government spending and revenue collection. For example, when demand is low in the economy, the government can step in and increase its spending to stimulate demand. Or it can lower taxes to increase disposable income for people as well as corporations. |
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Term
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Definition
| relates to the supply of money, which is controlled via factors such as interest rates and reserve requirements for banks. For example, to control high inflation, the Federal Reserve can raise interest rates thereby reducing money supply. |
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Term
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Definition
| Supply-side economics focuses on increasing overall supply (goods and services produced) in the long run. This is done by increasing the availability of capital, labor, and technology. |
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Term
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Definition
| focuses on demand-side economics. This is the famous 'spend your way out of a recession' argument. Keynes put forward that the government could take the place of consumers during a recession and spend enough money to restart the economy. This is obviously a short term policy meant to be used only under dire circumstances. |
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Term
| Two main differences between supply-side economics and keynesian economics |
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Definition
1. the time period to which they pertain
2. which side of the demand-supply equation they focus on |
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Term
| Horizontal equity principle |
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Definition
| claims that there is "equal treatment of equals." In other words, individuals who have the same wealth, or are in the same income bracket, should face the same tax rate. |
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Term
| Vertical equity principle |
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Definition
| claims that wealthier people, or those with access to more resources, should pay higher taxes. |
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Term
| What has caused bracket creep? |
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Definition
| inflation eventually erodes the equity of certain tax provisions. Although many items are now adjusted on an annual basis for inflation, others are not. Over time, taxpayers find themselves paying higher marginal tax rates, not because they have experienced real growth in earnings, but because inflation has caused “bracket creep.” |
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Term
| Unemployment and investment |
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Definition
| gov't tax cuts can boost the investment level in the economy and encourage the private sector to hire more |
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Term
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Definition
| a representation of the relationship between possible rates of taxation and the resulting levels of government revenue. |
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Term
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Definition
| Phillips curve is a historical inverse relationship between the rate of unemployment and the rate of inflation in an economy. Stated simply, the lower the unemployment in an economy is correlated with a higher rate of inflation. |
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Term
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Definition
| impacts lower income people |
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Term
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Definition
| impacts higher income people |
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Term
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Definition
| also known as redistribution of wealth means that the greater ability should pay more- those who can afford to payer higher fees, should. |
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Term
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Definition
| means that similar tax payers pay similar dues |
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Term
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Definition
| are efficiency, tax overlap (aka coordination) and equity |
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Term
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Definition
| tax on money earned (either progressive or regressive) |
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Term
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Definition
| taxes on corporations next profits |
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Term
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Definition
| tax on property (commercial or residential) |
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Term
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Definition
| gains on disposition of taxes |
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Term
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Definition
| goods & services, known as indirect, sales tax |
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Term
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Definition
| applies to the market value added to a product at each state of ---manufacturing. ($20 item selling for $30 leads to a tax on the $10 ---increment) |
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Term
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Definition
| – A sum of money paid by the individual who chooses to access a service or facility. Examples of user fees include highway tolls, parking charges and national park entry fees. |
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Term
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Definition
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Term
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Definition
| Fees charged to companies to service a city (like Cox Communications has to pay OKC for being allowed to do business.) |
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Term
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Definition
| Fishing licenses, hunting permits, cosmetology license, food handler’s permit, etc. |
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Term
|
Definition
o Meet supply and demand
o Make money
o Improve equity |
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Term
| disadvantages of user fees |
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Definition
o Difficult to collect
o Sometimes can be too much public resistance
o Deadly to shut service for low income |
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Term
| advantages of public monopolies |
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Definition
| can use user fee revenue collected to decrease the taxes otherwise needed to finance other unrelated services |
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Term
| disadvantages of public monopolies |
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Definition
| hidden cost can divert talent to operatiing a private business |
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Term
|
Definition
native american casinos operate differently than non- Native American casinos.
o States negotiate with tribes for the state take of the revenue of casinos |
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Term
|
Definition
o Proceeds will be used to support spending for some specific/popular policy area (earmarking)
o Education
o Senior citizens programs |
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Term
| disadvantages of lotteries |
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Definition
o It is difficult to determine if earmarking leads to a net increase in funding for the policy areas
o Due to fungibility of revenues - sources can be substituted for others without increasing spending for a particular program.
o State legislatures can cut other state program spending in commensuration with the earmarked revenue from lotteries.
o Small % of state revenues
o National average 2.3%
o One of most expensive taxes to administer
o Highly elastic to state income |
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Term
| Government Expenditures: Positive spillovers |
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Definition
| Include benefits from a benefit that is received by all but everyone does not pay for equally. An example would be elementary education. The positive spillover of not making parents pay all of the associated cost with their children’s educations means more children can be educated and go one to have gainful employment, less burden on the tax payer. |
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Term
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Definition
| Make minor adjustments to an existing budget. Doing things in increments. PY=previous year>CY current year>BY budget year |
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Term
| advantages of incrementalist approach to budgeting |
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Definition
| The advantages of the incrementalist approach to budgeting is the budget doesn’t have to be completely re-written every year, makes the budget more stable, provide continually |
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Term
| disadvantages of incrementalist approach to budgeting |
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Definition
| Disadvantages to the incrementalist approach are supplemental appropriation may need to be utilized, and it doesn’t address emergency situations like natural disasters very well. |
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Term
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Definition
| considers objectives, goals and analytical techniques cost and benefits. Disadvantages are this approach raises questions why does the money need to be spent, what is the justification for the expense |
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Term
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Definition
| - Budget by category, the more general the category the better, contains commodity cost of purchases for the previous year |
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Term
| advantages of line item veto budget |
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Definition
| Advantage: easy for the public to understand, stable, very transparent. |
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Term
| disadvantages of line item veto budget |
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Definition
| Disadvantage: sometimes too transparent, doesn’t address social values or cost, only done yearly, focused primarily on input. |
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Term
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Definition
| Was birthed out of the need to bring program data into the budget decision making process. Inception was during the First Hoover Commission in 1949. Congress provided in the National Security Act Amendments of 1949 that performance budgeting be used in the military. In 1950 the Dept of Defense adopted a single set of budget categories that were applied to all services. These categories included areas like personnel, maintenance and operation and research and development. Most of these categories are still used today. Performance budgeting introduced the use of program information in budget documents |
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Term
| Performance Based Budgeting |
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Definition
| strategic budgeting. Focuses on results rather than workload or activity. Places values into the budgeting process. Decisions are based on how well objectives are met. |
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Term
| disadvantages of performance based budgeting |
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Definition
| Disadvantages: expensive and time consuming |
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Term
| Planning-Programming Budgeting |
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Definition
| - everything is in separate discreet categories. It started in 1907. In 1965 Pres. Johnson asked every state agency to use PPB. This type of budgeting was discontinued because program objectives were not easily definable and sometimes services extended across multiple agencies. Started in the Department of Defense because the Sec of Defense R McNamara did not have management support. |
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Term
|
Definition
| What-if-budgeting-Starting at zero every year. This type of budget is prepared at the lowest level. Starts with decision packages that have different policy options to achieve one goal. This type of budgeting started in 1964. The Dept of Education used as a trial. Jimmy Carter read a Harvard Budget Review and encouraged its adoption ion the state of Georgia. He later required its adoption at the federal level when he became president. Didn’t work well on the national level. |
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Term
| advantages of zero based budgeting |
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Definition
| Advantages: provides method to keep cost down. Provides a range of alternatives, can work for a smaller program like transportation or public works. |
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Term
| disadvantages of zero based budgeting |
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Definition
| Disadvantages: bottom up approach, paper monster, doesn’t provide a way to deal with growing budget issues. |
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Term
| Envelope Budgeting or Policy and Expenditure Management (PEMS) |
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Definition
| Agencies were unhappy with PPB method. This method started in Canada. |
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Term
|
Definition
| This top down, rational budgeting that considers the cost and benefits. It is done by starting with revenues and political choice, chief exec sets target then the agencies sets targets and the executive branch make the final decision. |
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Term
| advantages of target based budgeting |
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Definition
| Advantages: takes politics out of legislation |
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Term
| disadvantages of target based budgeting |
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Definition
| Disadvantages: legislature not involved, assumes there will be discretionary funds. |
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Term
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Definition
| This involves taking a look at features some thought were missing or areas of budgeting that were considered problematic. This made the suggestion of rewarding innovative ideals or entrepreneurship, identify bad workers or system driven productivity or outcomes that are not good for the public interest, increased accountability, give incentives to agencies that making saving money a priority |
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Term
| Example of Enterprising Governments |
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Definition
| the goal of enterprising governments were trying to find ways to increase revenues and profits in the public sector, make government more businesslike, deal with investments and positive returns, deal with preventative measures, perform more like a market. |
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Term
| advantages of enterprising governments |
|
Definition
| profits from user fees over taxes |
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Term
| disadvantages of enterprising governments |
|
Definition
| only concerned about money not concerned with the poor |
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Term
| GPRA (Government Performance & Result Act of 1993) |
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Definition
| was a result of the congressional and presidential concern over waste and inefficiency in government and insufficient articulation of program goals and inadequate information on program performance. |
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Term
| What three things were the GPRA based on |
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Definition
| 1. Need to define their mission and desired outcomes. 2. Measure performance 3. Use the performance information to revise programs. |
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Term
| What did GPRA require federal agenices to have in place by the end of the 1997 fiscal year |
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Definition
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|
Term
| What 5 recommendations did the GAO give to GRPA? |
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Definition
| 1. Better coordination across overlapping and crosscutting programs 2. Improved management in the area of financial, human capital, IT, procurement and acquisition. 3. Improved quality and usefulness of performance information. 4. Sustained leadership commitment to accountability for results. 5. Partnering with Congress to shape agency goals, identify appropriate performance measures, and increase consultation. |
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Term
| Challenges to New Performance Budgeting |
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Definition
| Under the Obama administration PART was replaced with a new Performance Improvement and Analysis Framework. The focus shifted from performance budgeting to dealing with the recession and the budget deficit. Once of the biggest challenges to reform or new budgeting techniques is the past. New management practices take time to implement. There is also a concern whether or not new strategies will lead to the desired results. There is difficulty producing believable data. Simple errors in the data can deter progress. Some agencies have overlapping missions and outcomes or impacts may actually result from another agencies’ work. Lack of incentives can stifle efforts to use performance measurements. |
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Term
|
Definition
| performance management agenda a 5 prong agenda that included human capital, competitive sourcing, financial performance, e-government and budget/performance integration |
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Term
|
Definition
| budget performance integration |
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Term
|
Definition
| performance assessment rating tool introduces by President Bush created to evaluate the operations of government and move budget reform forward. The starting point was to identify 1,000 programs in the federal budget. In 2003 the Bush administration pledged to evaluate 200 of these programs each year for the next 5 years. The goal of PART was to identify the programs that worked well and how and why they worked well and issue a report. The report did identify key achievements with respect to meeting performance goals. PART consisted of a series a mainly yes-no questions that the agencies had to answer about their programs. PART got mixed reviews. Generally people thought this was more useful in the executive budgeting process. |
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Definition
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Definition
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Definition
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