Deck 13: Finance and Fiscal Policy

Question 1

The fund available to the Texas legislature for general appropriations purposes is called the

A) "rainy day" fund.
B) general obligation fund.
C) general revenue fund.
D) sales tax revenue fund.

Answer 1

C

Question 2

The Texas state tax mandated on the revenue of many businesses is the

A) state income tax.
B) general sales tax.
C) franchise tax.
D) severance tax.

Answer 2

C

Question 3

Most non-farm jobs in Texas are in the general area of

A) manufacturing.
B) service providing.
C) food processing.
D) local government.

Answer 3

B

Question 4

Texas has one of the most __________ state tax systems in the United States.

A) regressive
B) progressive
C) responsible
D) expensive

Question 5

Texas has generally resisted using all of the following to balance the budget, except

A) enacting a state income tax.
B) increasing various state taxes.
C) reducing agency funding.
D) borrowing from the "rainy day" fund.

Question 6

The traditional Texas fiscal policy is the achievement of a balanced budget through

A) low taxes and low levels of public spending.
B) high taxes and low public spending.
C) high taxes and high public spending.
D) low taxes and high public spending.

Question 7

More than half of the expenditures in Texas are paid from

A) federal grants-in-aid.
B) the general revenue fund.
C) dedicated funds.
D) general obligation and revenue bonds.

Question 8

The "pay-as-you-go" system means that the Texas legislature must

A) pay its bills on time.
B) pass a surplus budget.
C) borrow to pay its bills.
D) not pass a deficit budget.

Question 9

In response to pressure from small businesses, the state legislature recently

A) reduced the franchise tax for many businesses.
B) increased the taxes on tobacco products.
C) instituted a state income tax.
D) abolished the general sales tax.

Question 10

Government decisions regarding revenues, expenditures, and borrowing are referred to as

A) monetary policy.
B) foreign policy.
C) banking policy.
D) fiscal policy.

Question 11

Regarding fiscal policy, the Texas Constitution requires that the

A) legislature draft and pass an annual budget.
B) state's expenditures should be within 10 percent of projected state revenues.
C) state's spending should be in balance with projected state revenues.
D) governor certify that state spending is in balance with state revenues.

Question 12

Which of the following is not a source of revenue for Texas state government?

A) State income tax
B) General sales tax
C) Franchise tax
D) Severance tax

Question 13

Which group of Texans pays the most in taxes proportional to their income?

A) Middle class
B) Wealthiest 20 percent
C) Purchasers of luxury cars
D) Poorest 20 percent

Question 14

The online retailer Amazon must collect sales taxes on items consumers purchase because

A) it has facilities in the state of Texas.
B) it uses the Internet for consumer purchases.
C) Texas is a member of the Streamlined Sales and Use Tax Governing Board.
D) the Texas Supreme Court has ordered it to do so.

Question 15

Taxes that are a greater burden on lower incomes and less so on higher incomes are known as

A) flat taxes.
B) progressive taxes.
C) regressive taxes.
D) nominal taxes.

Question 16

So-called "sin taxes" are levies placed on

A) alcohol, mixed drinks, and tobacco.
B) food, clothing, and drinks.
C) hotel and restaurant revenues.
D) hunting and fishing activities.

Question 17

Taxes that rely more heavily on revenues from higher incomes are known as

A) flat taxes.
B) progressive taxes.
C) regressive taxes.
D) nominal taxes.

Question 18

The tax that produces the most significant amount of revenuein Texas is the

A) general sales tax.
B) selective sales tax.
C) business franchise tax.
D) gross receipts tax.

Question 19

Most Texans have indicated in numerous polls that they prefer __________ taxation.

A) regressive
B) progressive
C) flat
D) neutral

Question 20

The fund that measures the state's fiscal health is the

A) selective sales tax fund.
B) rainy day contingency fund.
C) general revenue fund.
D) overall lottery fund.

Question 21

Unlike the federal budget, a budget passed by the Texas legislature

A) must pass both the house and Senate.
B) requires a four-fifths vote to override a veto.
C) authorizes spending for a two-year period.
D) must go to the chief executive for approval.

Question 22

In order for Texas to increase its bond debt, approval must be given by the

A) Texas legislature.
B) Texas governor.
C) voters of Texas.
D) comptroller of public accounts.

Question 23

Grants-in-aid are defined as

A) money from the federal government to the state.
B) state matching of federal funds.
C) money from private foundations to the state.
D) federal money to states based on income tax ratios.

Question 24

Where does Texas rank among the states in the tax burden on its citizens?

A) Near the top
B) About twentieth
C) About thirty-fifth
D) Near the bottom

Question 25

The fiscal biennium in Texas begins on

A) July 1 of odd-numbered years.
B) January 1 of even-numbered years.
C) September 1 of odd-numbered years.
D) October 1 of even-numbered years.

Question 26

Texas may accrue state debt when it

A) relies on federal funding.
B) instituted a state-wide lottery system.
C) passes a supplemental budget.
D) issues general obligation or revenue bonds.

Question 27

A bond whose repayment is guaranteed by the full faith and credit of the state is a

A) revenue bond.
B) general obligation bond.
C) special assessment bond.
D) limited obligation bond.

Question 28

Most taxes in Texas are administered by the

A) commissioner of insurance.
B) comptroller of public accounts.
C) secretary of the Treasury.
D) county tax assessor-collector.

Question 29

The state of Texas provides workers compensation under monies collected from

A) payroll taxes.
B) severance taxes.
C) selective sales taxes.
D) general obligation bonds.

Question 30

Another name for the state's Economic Stabilization Fund is the

A) general obligation fund.
B) "pork barrel fund."
C) "rainy day" fund.
D) general revenue fund.

Question 31

If someone fails to claim their prize from the Texas Lottery within 180 days after a drawing the money is used to fund

A) welfare programs.
B) public education.
C) gambling addiction treatment programs.
D) hospitals for indigent care.

Question 32

The unemployment compensation system is supported by

A) a special sales tax.
B) an excise tax.
C) a payroll tax.
D) a severance tax.

Question 33

The state's Economic Stabilization Fund is

A) funded by proceeds from the state lottery.
B) used to fund local government operations.
C) used to supplement federal grants when those decline.
D) sometimes called the "rainy day" fund.

Question 34

As a result of a lawsuit filed by the State of Texas over tobacco related illnesses, the American tobacco industry must pay

A) $25 million in damages.
B) $18 billion in damages.
C) $100 million in damages.
D) $233 million in damages.

Question 35

Arguably the most influential budgeting organization in Texas is the

A) Treasurer's Office.
B) Legislative Budget Board.
C) State Auditor's Office.
D) Governor's Office of Budget and Planning.

Question 36

A state tax levied on a natural resource taken from the earth is the

A) franchise tax.
B) severance tax.
C) special sales tax.
D) corporate user tax.

Question 37

The investment of state funds is currently handled by the

A) comptroller of public accounts.
B) State Auditor's Office.
C) state treasurer.
D) Legislative Budget Board.

Question 38

The largest share of public land revenue in Texas is derived from

A) the sale of land to private individuals.
B) the sale of timber.
C) oil lease fees and royalties.
D) recreational use fees.

Question 39

Which of the following classes of corporations has the least business tax burden?

A) Oil companies
B) Banking companies
C) Insurance companies
D) Public utility companies

Question 40

Which state program in Texas does not receive substantial federal funding?

A) Public education
B) Highways
C) Teacher retirement
D) Public assistance

Question 41

Which of the following task(s) does the comptroller's office oversee?

A) Preparing the state's budget
B) Issuing checks to pay state obligations
C) Appropriating lottery funds
D) Selling general obligation bonds

Question 42

The "dual budgeting" system in Texas means that both

A) revenues and expenditures are equal.
B) the house and Senate must pass the budget.
C) the comptroller and treasurer authorize spending.
D) the governor and the legislature draw up budget proposals.

Question 43

The Robin Hood Plan is an attempt to equalize funding among

A) charter schools.
B) public schools.
C) private universities.
D) public universities.

Question 44

Approximately what percentage of state expenditures goes to Health and Human Services funding?

A) 15-20 percent
B) 25-30 percent
C) 35-40 percent
D) 45-50 percent

Question 45

Parents may lock in the cost of future tuition and fees at a state university or college through

A) Teach for Texas Fund.
B) Texas Tomorrow Fund.
C) Available University Fund.
D) Texas Grant towards Excellence Fund.

Question 46

Most major agency purchases are made through or are supervised by the

A) Council on Competitive Government.
B) comptroller of public accounts.
C) Texas Procurement and Support Services.
D) State Auditor's Office.

Question 47

Which factor will increase the state's outcomes-based funding to a community college?

A) An increase in enrollment
B) A decrease in tuition rates
C) An increase in the number of low-income students enrolled
D) An increase in the number of students successfully completing courses

Question 48

The second largest single expenditure item by functional class of the Texas government is

A) debt service.
B) public elementary and secondary education.
C) public higher education.
D) public assistance.

Question 49

Which of the following determines if state agencies have spent public funds in accordance with law?

A) The comptroller of public accounts
B) The State Auditor's Office
C) The Legislative Budget Board
D) The secretary of state

Question 50

The state auditor is appointed by and serves at the will of the

A) Texas governor.
B) secretary of state.
C) Legislative Budget Board.
D) Legislative Audit Committee.

Question 51

Which area of the state is home to the newest regional comprehensive university?

A) The Rio Grande Valley
B) The Houston metropolitan area
C) The Texas Panhandle
D) The El Paso metropolitan area

Question 52

Compared to the rest of the nation, the number of children without health insurance coverage in Texasis

A) among the lowest.
B) about average.
C) the highest.
D) decreasing rapidly.

Question 53

State accounts are audited under the direct supervision of the

A) state comptroller.
B) state treasurer.
C) lieutenant governor.
D) state auditor.

Question 54

In Texas, projected revenue levels are provided to the governor and legislature by the

A) State Auditor's Office.
B) state comptroller of public accounts.
C) General Accounting Office.
D) Governor's Office of Budget and Planning.

Question 55

What amount of state funding for public schools is provided by the Foundation School Fund?

A) Less than 50 percent
B) Approximately 60 percent
C) Approximately 70 percent
D) More than 70 percent

Question 56

Which agency takes reservations for football tailgating on state property in Austin?

A) The Governor's Office of Budget, Planning and Policy
B) The Texas Facilities Commission
C) The office of the comptroller of public accounts
D) The Texas Higher Education Coordinating Board

Question 57

The program acronym CHIP stands for

A) Christian Hospital Insurance Plan.
B) Children's Health Insurance Program.
C) Cooperative Hospital Inclusive Project.
D) Children's Home Improvement Protection.

Question 58

Approximately what percentage of state expenditures goes to all education funding in Texas?

A) 15-20 percent
B) 25-30 percent
C) 35-40 percent
D) 45-50 percent

Question 59

The state's largest financial aid program is the

A) Teach for Texas Fund.
B) Texas Tomorrow Fund.
C) Texas Tuition Equalization Grant Program.
D) Texas Grant Program (Toward Excellence, Access, and Success).

Question 60

After the legislature approves a biennial budget, the governor cannot sign it until

A) the attorney general issues an opinion that all expenditures are permitted by the Texas Constitution.
B) the lieutenant governor and the Speaker of the House vote to approve it.
C) the Legislative Budget Board certifies that proper procedures were followed in approving the budget.
D) the comptroller certifies the state will collect sufficient revenue to cover the expenditures.

Question 61

Describe the state's efforts to collect sales tax from online businesses.

Question 62

Identify and describe the various taxes imposed by the state of Texas to raise revenues. Identify the population that each tax targets and an approximation of which taxes raise the most revenues.

Question 63

Describe the history of highway funding in Texas. Identify problems associated with the current system and possible solutions. Should more funding in Texas go to public transportation? Why or why not?

Question 64

Explain the role of the comptroller of public accounts.

Question 65

Describe the procedure for developing and approving a state budget in Texas. Include the roles played by those involved from both the executive and legislative branches. What are the positive and negative aspects of using a two-year budget cycle?

Question 66

Describe the system of higher education funding at Texas colleges and universities. Explain how funding for community colleges differs from that of four-year institutions. Identify some of the controversies surrounding higher education funding.

Question 67

Texas has a regressive system of taxation. Describe the difference between progressive and regressive revenues, and which groups in society benefit from each. Explain why you think Texas should or should not adopt a more progressive system of taxation.

Question 68

What is the purpose of the Economic Stabilization Fund in Texas? Describe how it was created and isutilized.

Question 69

According to the Texas Transportation Commission, the newest means of financing Texas highways is the use of

A) money from the sale of bonds.
B) money collected from tolls.
C) increased gas taxes.
D) a state income tax.

Question 70

Explain the state's role in helping students afford a higher education.

Question 71

Describe the system of public assistance in Texas, particularly as it applies to health care. Should the state of Texas make Health and Human Services for children more of a priority? Why or why not?

Question 72

Describe the legal mechanisms in place to keep the Texas budget balanced.

Question 73

Describe the system of public school (K-12) funding in Texas. Why is unequal funding such a problem for public schools? Evaluate the "Robin Hood"plan for funding equalization.

Question 74

Identify and describe the non-tax sources of revenue on which Texas relies. What are the positive and negative aspects of relying on these revenue sources? Which of these non-tax revenues could Texas least afford to lose, and why?

Question 75

Which statement best characterizes the status of Texas highways?

A) Many highways are in disrepair, but there are adequate funds for their repair.
B) Large sums of money are currently needed for highway repair and maintenance.
C) It probably makes more sense to build new highways than to repair old ones.
D) The state has more than adequately maintained its highways since 1984.

Question 76

The "toilet-to-tap" program describes

A) the recycling of toilet water for human consumption.
B) a water conservation program for low-flow toilets.
C) a technology program that monitors home water consumption.
D) a state grant program to fund water conservation efforts.

Question 77

Explain the role of the Legislative Budget Board.

Question 78

The problem with denying CHIP benefits to children is that it involves

A) a reduction of federal money to the state.
B) an increase in taxes for the wealthy.
C) an increase in the state's debt.
D) a reduction in hospital taxes for the needy.

Question 79

Describe the rules regarding government debt in Texas. Why does the government borrow when it does? Describe both positive and negative aspects of the way that Texas handles government borrowing.