Deck 10: The State Economy and the Financing of State Government

Question 1

The tax structure of Texas is complicated by the fact that the poor pay a greater percentage of their income in taxes than do the wealthy in Texas.

Answer 1

True

Question 2

After adjustments for population growth and inflation are made, the Texas budget has been relatively flat from the period from 1990 to 2004.

Answer 2

True

Question 3

Historically, the Texas economy was based on natural resources such as oil, land, and water.

Answer 3

True

Question 4

In 2000, almost one-half of the Texas economy is derived from the production, processing, and sale of agricultural products.

Question 5

The collapse in the price of oil in the 1980s created a major economic dislocation for the Texas economy.

Question 6

The North American Free Trade Agreement created a major boom for the border cities of Texas.

Question 7

The Texas tax structure is highly elastic and is easily adjusted for the cycles in the economy.

Question 8

Taxes create over three-quarters of the revenue necessary to fund the Texas budget.

Question 9

The largest non-tax revenue source for the Texas budget are intergovernmental transfers from the federal government.

Question 10

Sales of lottery tickets now fund about ten percent of the Texas budget.

Question 11

Grants from the federal government which go to fund specific programs are called categorical grants.

Question 12

The per capita state debt in Texas is about the same as the national average.

Question 13

For the legislature to engage in deficit financing requires a four-fifths vote of the legislature.

Question 14

Since the year 2000, college and university tuition in Texas has steadily been reduced.

Question 15

The Texas legislature has been shifting the burden of financing the state budget from the taxpayers to others by raising the fees for governmental services.

Question 16

Texas is rated by the Citizens for Tax Justice as being one of the states with the most regressive tax structure in the nation.

Question 17

A fair tax structure is a value associated with a democratic government.

Question 18

A severance tax is a tax levied on natural resources which are removed from the earth.

Question 19

In 2006 the Texas corporate franchise tax was changed to make it in effect a corporation income tax.

Question 20

The per capita tax burden in Texas places Texas as having one of the highest tax burdens of any of the urban states.

Question 21

The current strategy by the national government is to increase the amount of federal aid flowing to the states.

Question 22

Privatization is a name given to the practice of having governmental activities conducted by corporate rather than governmental employees.

Question 23

Primary responsibility for the planning of the Texas budget rests with the Legislative Budget Board.

Question 24

The final version of the appropriations bill is written by a conference committee appointed by the presiding officers of the Texas legislature.

Question 25

The Comptroller of Public Accounts has an item veto over items in the budget.

Question 26

The Comptroller of Public Accounts must certify the budget passed by the legislature before it can go to the governor.

Question 27

The item veto of the governor allows the governor to strike out individual provisions from the appropriations bill.

Question 28

Health and Human Services and Education account for three-quarters of the Texas budget.

Question 29

The state of Texas is responsible for the building and upkeep of school buildings of Texas public school buildings.

Question 30

Texas spends more on education per capita than most other major urban states.

Question 31

Texas ranks in the upper quarter of the states in per capita spending on health and human services.

Question 32

The percentage of the state's budget spent on highways has increased over the past two decades.

Question 33

Since 1990, after adjusting for inflation and population growth, the budget of Texas has:

A) increased over fifty percent
B) decreased over fifty percent
C) increased about twenty-five percent
D) barely kept pace with inflation

Question 34

The Texas economy was initially based on:

A) exploitation of natural resources such as oil, land, and water
B) manual labor
C) industrial growth
D) technological services

Question 35

The tax system of Texas cannot readily adjust for economic cycles. Thus it is said to be

A) regressive
B) progressive
C) proportional
D) inelastic

Question 36

Which of the following was not cited by the authors as a reason for the ups and downs of the Texas economy and budget?

A) over-production of oil and the resulting drop in prices
B) decreased federal aid over the past twenty-five years
C) a drop in the state's income tax
D) serious cycles of inflation

Question 37

Almost one-half of the state's revenue comes from:

A) user fees
B) investment income
C) taxes
D) rebates from local governments

Question 38

The official charged with the collection of most of the state's taxes is the

A) State Treasurer
B) local county tax-assessor collectors
C) Comptroller of Public Accounts
D) Governor of Texas

Question 39

Which of the following sources of revenue for the state of Texas has not experienced declines in recent years?

A) general sales tax
B) state lottery
C) severance taxes
D) oil and gas leases

Question 40

The largest single non-tax revenue source for the state of Texas has been

A) the lottery
B) drivers license fees
C) federal aid
D) college and university tuition

Question 41

Before the state of Texas can borrow money on the credit of the state, what must happen?

A) the legislature must approve a bill to borrow the money
B) the governor must sign a personal note for the money
C) the voters must give approval by adopting a constitutional amendment
D) the Comptroller of Public Accounts must approve the loan

Question 42

Which of the following is an example of a regulatory tax?

A) state severance taxes
B) tobacco and liquor taxes
C) corporate franchise tax
D) general sales tax

Question 43

The Texas tax system is generally classified as

A) highly progressive
B) generally progressive
C) generally proportional
D) generally regressive

Question 44

Taxes on tobacco and alcoholic beverages are generally listed as

A) general sales taxes
B) selective sales taxes (excise taxes)
C) income taxes
D) gross receipts taxes

Question 45

A regressive tax is one that

A) charges persons with different levels of income the same rate of tax
B) taxes a larger percentage for those with lower incomes
C) taxes a larger percentage for those who have higher incomes
D) taxes everyone the same percentage of their income

Question 46

Which of the following is not a strategy used by the state of Texas to meet the needs of additional revenue?

A) performance evaluation to make government more effective
B) increasing fees on citizens for governmental services
C) changing the revenue structure
D) all of the above have been utilized

Question 47

The entity that take the lead in formulating the budget for the state government during the planning phase is the

A) State Auditor's Office
B) Executive Budget Office
C) Legislative Budget Board
D) staffs of the House Appropriations or Senate Finance Committees

Question 48

Which of the following is a major role of the Comptroller of Public Accounts in the budget process?

A) providing periodic estimates of available revenue
B) providing periodic reports of state spending
C) certifying the final budget before it goes to the Governor for approval
D) all of the above are important roles of the Comptroller

Question 49

Which of the following functions receives the largest share of federal funding?

A) education
B) pollution control
C) health and human services
D) transportation

Question 50

The function which received the majority of federal funds is

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

Question 51

How has the cyclical nature of the Texas economy affected the state's budget? What does the term inelastic mean as applied to a state budget?

Question 52

What are the major categories of taxes levied in Texas? Which group of taxes produces the most revenue?

Question 53

Discuss the concept of a progressive and a regressive tax system? Which does Texas have? Why do most experts believe this to be the case?

Question 54

Describe the main steps of the budget process in Texas. How significant is the Legislative Budget Board in the budget process? How significant is the governor?

Question 55

What functions require the most revenue in Texas? How does Texas rank with other states in per capita spending on education and highways?

Question 56

Based on your analysis, what are the chances that the state of Texas is likely to adopt an income tax in the immediate future?