Deck 12: Fiscal Policy

Question 1

Which of the following do the authors cite as an example of a regressive form of taxation?

A) property taxes
B) the franchise tax
C) the severance tax
D) the sales tax
E) the income tax

Answer 1

D

Question 2

Subsidies are incentives designed to ______ the production or purchase of certain goods.

A) drive down
B) stimulate c diminish
D) dissuade

Answer 2

B

Question 3

What is the primary source of Texas's Rainy Day Fund?

A) state property taxes
B) oil and gas taxes
C) licensing fees
D) the franchise tax

Answer 3

B

Question 4

Which of the following characteristic is accurate regarding regressive taxation?

A) Texas takes a regressive approach to taxation due to the reliance on the sales tax.
B) Regressive taxation places higher rates of taxation on people with higher incomes.
C) Texas emphasizes the use of income taxation rather than regressive taxation.
D) Income taxes are traditionally among the most regressive forms of taxes.

Question 5

Which type of tax was expanded in 2006 to fund public education?

A) sin tax
B) excise tax
C) franchise tax
D) severance tax

Question 6

Sin taxes are ______.

A) taxes on products and activities that legislators would like to discourage
B) taxes on natural resources charged when the resources are produced
C) the primary tax on businesses in Texas
D) taxes based on property value
E) taxes on excessive income

Question 7

The authors describe Texas as a "pay-as-you-go" state. What does the phrase "pay as you go" mean?

A) The state of Texas does not create an annual budget; it creates a monthly budget.
B) The Texas Constitution requires a balanced budget, thus limiting debt.
C) All spending in the budget must be tied to a specific revenue source.
D) The Texas budget must get approval from the U.S. Department of the Treasury.

Question 8

Although the lottery is unpopular among many groups, why does it remain a revenue source for Texas?

A) Lottery revenue is the largest single source of revenue for the state, and elimination would be devastating.
B) The revenue lost from eliminating the lottery would mean spending cuts or raising other taxes.
C) Lottery revenue is the only source of funding for Texas's public education system.
D) The state constitution requires a certain proportion of state revenue to come from gambling.
E) Advocates for the poor argue that the lottery is the only way out of poverty in Texas.

Question 9

Which of the following statements is true regarding taxation and the cost of building and maintaining roads over the past twenty years?

A) The Texas Legislature has increased the gasoline tax to generate more revenue for highway construction.
B) Tax revenue for highways has not kept up with the increasing costs of building and maintaining roads.
C) The Texas Legislature has decreased the gasoline tax because the cost to build and maintain roads has declined.
D) The Texas Legislature has kept the gasoline tax stable because the cost of building and maintaining roads has not changed.

Question 10

Whereas redistributive policy ______, distributive policy ______.

A) intentionally moves benefits from one group to another; does not intentionally target one specific group of society
B) does not intentionally target one specific group of society; intentionally moves benefits from one group to another
C) does not require revenue; involves taxation
D) requires substantial income tax revenue; is based on sales tax revenues
E) involves the federal government; affects state policy only

Question 11

A tax on real estate is a(an) ______.

A) sin tax
B) excise tax
C) franchise tax
D) property tax

Question 12

Texas relies on sources of revenue other than taxes. Which of the following is accurate regarding these other sources of revenue?

A) Grants from the federal government make up around 40 percent of state revenue.
B) The Permanent School Fund is derived from both sales taxes and lottery sales.
C) Funds from various licenses account for about one-half of state revenue.
D) The Texas Constitution forbids the earning of interest income on investments.
E) Lottery proceeds are distributed to cities on a per-population basis.

Question 13

Which of the following accurately describes the agenda-setting step in the policymaking process?

A) Policymakers develop and debate possible solutions to various problems facing the state.
B) Policymakers prioritize the various problems facing the state.
C) Policymakers take formal governmental administrative action.
D) State agencies follow up on the actions of elected officials, and bureaucratic agencies develop rules and regulations.
E) Government agencies, the legislature, and interest groups examine policy implementation to see if goals are met.

Question 14

Which of the following describes the severance tax?

A) a tax on the extraction of oil
B) a tax on activities such as cigarettes and gambling
C) a tax on spirits and mixed drinks
D) a tax based on the value of a property appraisal
E) a tax on income

Question 15

Which of the following accurately describes the policy adoption step in the policymaking process?

A) Policymakers develop and debate possible solutions to various problems facing the state.
B) Policymakers prioritize the various problems facing the state.
C) Policymakers take formal governmental administrative action.
D) State agencies follow up on the actions of elected officials, and bureaucratic agencies develop rules and regulations.
E) Government agencies, the legislature, and interest groups examine policy implementation to see if goals are met.

Question 16

Which of the following is NOT a tax levied on Texans by their state?

A) the severance tax
B) excise taxes
C) a franchise tax
D) property taxes
E) the income tax

Question 17

The authors list three types of policies at the beginning of the chapter. Which of the following is a type of policy mentioned?

A) punitive policy
B) redistributive policy
C) extraconstitutional policy
D) gubernatorial policy
E) facilitative policy

Question 18

Which of the following accurately describes the policy implementation step in the policymaking process?

A) Policymakers develop and debate possible solutions to various problems facing the state.
B) Policymakers prioritize the various problems facing the state.
C) Policymakers take formal governmental administrative action.
D) State agencies follow up on the actions of elected officials, and bureaucratic agencies develop rules and regulations.
E) Government agencies, the legislature, and interest groups examine policy implementation to see if goals are met.

Question 19

A bill cannot be considered passed by the Texas Legislature unless the ______ has authorized that the amount to be spent by the bill is available.

A) lieutenant governor
B) attorney general
C) comptroller
D) Speaker of the Texas House

Question 20

The state's largest source of investment income comes from ______.

A) the sales tax
B) the federal government
C) the Permanent School Fund
D) property taxes
E) state employee trust funds

Question 21

What was the original purpose of the Legislative Budget Board?

A) to coordinate the budget process
B) to consolidate several Senate budget committees into one committee
C) to consolidate several House of Representatives budget committees into one committee
D) to make budgetary decisions and bypass floor votes

Question 22

The purpose of the Legislative Appropriation Request (LAR) is to ______.

A) grant the final approval of state spending
B) develop a comprehension tax plan
C) guide agencies in developing their budget requests
D) none of these

Question 23

In what year was the Legislative Budget Board created?

A) 1999
B) 1949
C) 2009
D) 1899

Question 24

Which type of tax is leveled against those who fail to identify with a religious organization?

A) sin tax
B) excise tax
C) franchise tax
D) No such tax exists.

Question 25

The Legislative Appropriation Request (LAR) is initiated by ______.

A) the Governor's Office of Budget, Planning, and Policy
B) the Texas Speaker of the House
C) the Legislative Budget Board
D) the Department of Family and Protective Services

Question 26

Which government function receives the second highest level of expenditures?

A) transportation
B) education
C) public safety and corrections
D) employee benefits

Question 27

In terms of investment, the Permanent School Fund is the ______ source of investment income in Texas.

A) smallest
B) third largest
C) second smallest
D) largest

Question 28

The Legislative Budget Board is cochaired by ______.

A) the governor and the Speaker of the Texas House
B) the majority leader and the minority leader in the House
C) Texas Senate leaders and the governor
D) the Speaker of the Texas House and the lieutenant governor

Question 29

What is the current annual cap on the annual increase in taxable value for a home?

A) 1 percent
B) 50 percent
C) 10 percent
D) There is no cap.

Question 30

The official name for the Rainy Day Fund is ______.

A) the Economic Recovery Account
B) the Economic Stabilization Fund
C) Texas Savers
D) Emergency Economic Reserves

Question 31

How many billions of dollars did the state of Texas receive in federal grants in 2017?

A) 0.0015
B) 1.0005
C) 38
D) 1192.5

Question 32

What percentage of state revenue came from the federal government in 2017?

A) around 10 percent
B) around 20 percent
C) around 33 percent
D) around 50 percent

Question 33

Which agency is responsible for assisting the governor in the development of a budget proposal?

A) the Legislative Budget Board
B) the Governor's Office of Budget, Planning, and Policy
C) the Department of Family and Protective Services
D) the Legislative Appropriation Request

Question 34

Lieutenant Governor Bob Bullock increased the comptroller budget by promising the governor and state legislature ______.

A) an end to corruption
B) digital conversion of all state records
C) dramatically increased state revenue
D) fewer tax audits of state employees

Question 35

Why does the Texas lottery remain an important part of state revenue, despite criticism from many segments of society?

A) The Texas Constitution mandates gambling.
B) Religious leaders ultimately support gambling.
C) No one has found an agreeable way to replace the income it generates.
D) Individual legislators receive kickbacks from lottery officials.

Question 36

Which government function receives the most public expenditures?

A) transportation
B) regulatory services
C) public safety and corrections
D) health and human services

Question 37

In 1879, the first ______ was signed into law by Governor Roberts.

A) sin tax
B) excise tax
C) franchise tax
D) property tax

Question 38

An appraiser visits your house and judges the current market value of the property. The appraisal results in a change to your property tax. Property tax is an example of which type of tax?

A) appraisal tax
B) sin tax
C) excise tax
D) ad valorem tax

Question 39

What percentage of state revenue comes from taxation?

A) 8 percent
B) 98 percent
C) 45 percent
D) 80 percent

Question 40

The percentage of Texas state income that comes from the federal government has ______.

A) increased dramatically during the past two decades
B) decreased during the past two decades
C) stayed the same during the past two decades
D) increased slightly during the past two decades

Question 41

More than 30 percent of state revenue is provided by federal grants, rather than from taxes levied by the state of Texas.

Question 42

The state's general sales tax is set at 11 percent.

Question 43

The authors discuss the following types of taxes: severance, franchise, sin, excise, and ad valorem. Compare and contrast three of these five.

Question 44

After an appropriations bill is passed, the ______ must certify that sufficient revenue will be available to pay for the budget.

A) governor
B) comptroller
C) Speaker of the Texas House
D) director of Health and Human Services

Question 45

Define regressive and progressive taxation. Why would a person support regressive taxation, and why would a person support progressive taxation?

Question 46

How many legislators must vote to declare an emergency?

A) one-third
B) four-fifths
C) two-thirds
D) three-fifths

Question 47

The revenue estimate of the legislative budget officer becomes the ceiling for state spending.

Question 48

How many years does the legislature budget for?

A) five
B) one
C) two
D) three

Question 49

The gas tax rate in Texas is one of the highest in the nation.

Question 50

Despite the unpopularity of the Texas lottery among Texas conservatives, the lottery remains because ______.

A) conservatives lack the majority needed to stop the lottery
B) gambling is a federally protected basic right
C) replacing state revenue from the lottery would require higher taxes
D) many lawmakers secretly play the lottery but publicly denounce it

Question 51

Under what circumstances can the Texas Legislature borrow more than $200,000?

A) to resolve a budget shortfall
B) when they wish to reduce taxes
C) when repelling invasions
D) to help fund private businesses

Question 52

How has the size of the Texas budget changed in the past thirty years?

Question 53

In November 2013, Texas voters approved use of the Rainy Day Fund to pay for ______ projects.

A) road maintenance
B) literacy education
C) water
D) mass transit