Deck 8: The California Budget Process

Question 1

Approximately how large is California's annual general fund budget?

A)under $5 billion
B)$25 billion
C)$50 billion
D)over $100 billion

Answer 1

D

Question 2

Rather than raising taxes currently to pay for infrastructure projects like bridge repairs, high-speed rail projects, or earthquake retrofitting for hospitals, it is common practice in California to pay for such projects through:

A)general obligation bonds
B)special, temporary fees earmarked for dedicated projects
C)federal grants that do not need to repaid
D)gifts from foreign governments

Answer 2

A

Question 3

The three major taxes in California that cover most of California's expenditures are:

A)property, income, and excise taxes
B)property, sales, and excise taxes
C)personal income, sales, and corporate taxes
D)corporate taxes, property taxes, and vehicle license taxes

Answer 3

C

Question 4

What does Governor Jerry Brown mean by the "Wall of Debt" that California faces?

A)State debt is so high that it is now impossible to write a budget without a deficit.
B)High debt has accumulated from selling bonds to close the budget gap, borrowing from accounts intended for other purposes, and unemployment insurance loans from the U.S.government.
C)California borrowed stimulus funds and now must repay billions of dollars to the federal government, because it can't account for how the money was spent.
D)Every year the state sells more general obligation bonds, and they are unlikely to be repaid.

Question 5

Approximately how much debt does the state carry in general obligation bonds that need to be repaid over time?

A)$1 billion
B)$45 billion
C)$75 billion
D)$500 billion

Question 6

The state spends most of its annual budget on:

A)education and health and human services
B)prisons and general government
C)business, transportation, and housing
D)interest on the debt

Question 7

Voters passed a new law in 2010 that reduced the majority needed to pass the budget from a supermajority to a simple majority.In 2011, the legislature passed a budget on time for the first time in five years.This is an example of:

A)how rules help shape outcomes
B)how a good economy in 2011 made legislators' decisions easy
C)successful bipartisanship and compromise between the parties
D)all of the above

Question 8

The large bills that accompany the budget and contain necessary policy changes to state law reflected in the amounts budgeted are called

A)advisory statements
B)amendment bills
C)trailer bills
D)omnibus spending bills

Question 9

On average, how long does it usually take to construct an annual budget?

A)one season, or about three to four months
B)five to six months
C)one year
D)eighteen months

Question 10

The state's base sales tax rate is:

A)1.5%
B)3.5%
C)4.5%
D)7.5%

Question 11

When expenses exceed revenues, the state has:

A)bonded debt
B)a budget deficit
C)debt
E)excess revenue

Question 12

An "excise tax" is surcharge placed on:

A)liquor, tobacco, and fuel
B)property
C)wages/income
D)utilities

Question 13

Revenue is another word for:

A)expenditures
B)income
C)funding levels
D)spending commitments

Question 14

Proposition 98 dictates that approximately _________ percent of the general fund budget must go to fund K-14 education every year.

A)10 percent
B)20 percent
C)40 percent
D)60 percent

Question 15

About how much of the state's general fund budget comes from personal income taxes, or the "PIT"?

A)ten percent
B)a quarter
C)half
D)two-thirds

Question 16

Approximately how large is California's total annual budget when federal funds, bond funds, and special funds are taken into account?

A)just under $5 billion
B)$20 billion
C)$100 billion
D)over $200 billion

Question 17

Comparatively, Californians pay higher_______ than residents in other states, but lower _______ taxes.

A)excise; income and corporate taxes
B)property; sales
C)income and corporate taxes; property
D)sales; income and corporate taxes

Question 18

Which state organization bears the largest responsibility for preparing the state budget?

A)the Legislative Analyst
B)the state Treasurer's Office
C)the Senate Office of Research
D)the Department of Finance

Question 19

California's fiscal year begins _______ and ends _______.

A)January 1; December 31
B)April 1; March 31
C)July 1; June 30
D)October 1; September 30

Question 20

In an average year, what is the state's largest single source of revenue?

A)corporate taxes
B)personal income taxes
C)federal grants
D)excise taxes

Question 21

Most annual spending is mandatory, meaning that legislators must spend certain amounts of the budget on items that are required by law.

Question 22

Considering property, income, corporate, excise, and sales taxes, California has the highest tax burden in the nation.

Question 23

It is common practice for governors to veto the state budget bill.

Question 24

Corporate taxes represent a much larger source of state revenue than income taxes.

Question 25

California taxpayers are generally opposed to higher taxes.They tend to make exceptions and to support new taxes or higher tax rates when:

A)the economy is bad and there is a budget deficit that needs to be fixed
B)the taxes are dedicated for specific purposes
C)there is a Democratic governor in charge
D)there is Republican governor in charge'

Question 26

In fiscal year 2015-16, the federal government was scheduled to transfer approximately $________ to the state government, as well as local governments.

A)$100 billion
B)$50 billion
C)$1 billion
D)$500 million

Question 27

What vote threshold must be reached for the legislature to approve new taxes or raise fees?

A)a plurality
B)a simple majority (50 percent + 1)
C)a supermajority of 55 percent
D)a supermajority of 2/3

Question 28

It takes 2/3 vote to raise taxes and fees.What vote threshold must be reached to reduce taxes and fees?

A)a simple majority (50% plus 1)
B)a supermajority of 55%
C)a supermajority of 2/3 (66.6%)
C)a supermajority of ¾ (75%)

Question 29

Which one of these represents the biggest source of the state's annual revenues?

A)taxpayers in the middle income and lower income tax brackets (combined)
B)sales taxes
C)property taxes
D)the top 1 percent of taxpayers

Question 30

The budget process occasionally follows the "textbook version." More often, permutations of the process occur.

Question 31

The state spends most of its annual budget on_________ .

A)education and health and human services
B)prisons and general government
C)business, transportation, and housing
D)interest on the debt

Question 32

Which of these tools has Governor Jerry Brown used to balance the state's annual budget?

A)raising substantially the fees and penalties that drivers pay for traffic violations
B)raising the excise taxes on tobacco and alcohol
C)endorsing a proposition to temporarily raise the state sales tax by ¼ percent
D)raising taxes on those on the bottom of the income scale

Question 33

Under Governor Jerry Brown, the state's structural deficit has been eliminated.

Question 34

It is common practice for governors to use the line-item veto with the budget bill.

Question 35

The annual budget is a bill that must pass both houses of the legislature with a simply majority vote, and then be signed into law by the governor.

Question 36

Since 2007, the state has dedicated less and less from the general fund to higher education, and has raised fees and tuition year after year.

Question 37

How are large infrastructure projects - such as high-speed rail or school construction - usually funded in California?

A)through user fees
B)through sales taxes imposed on all consumers
C)through issuing or selling bonds that the state will repay with interest
D)through a combination of tax and fee increases, a "pay as you go" approach

Question 38

Despite the fact that the legislative leaders negotiate a final version of the budget, the governor can make final adjustments to it through the line-item veto.

Question 39

The recent voter-approved proposition that raised the state's sales tax by 1/4 % and was endorsed by Jerry Brown as necessary to keep education funded is:

A)Prop 9
B)Prop 140
C)Prop 30
D)Prop 8

Question 40

Interest on the state's debt obligations represents approximately how much of the state's general fund budget?

A)close to zero percent
B)7 percent
D)19 percent
E)50 percent

Question 41

Local governments are prohibited from lobbying the state legislature about budget items that affect their cities, counties, special districts, or school districts.

Question 42

Lobbyists don't just work for private interests; they also represent schools, special districts, cities, and counties - in other words, local governments - in the lawmaking and budgeting process.

Question 43

Californians pay among the lowest property tax rates but the highest sales tax rates among the U.S.states.

Question 44

The top 1 percent of income-earners in California paid close to half of the state's total income taxes.