Deck 11: Finance and Fiscal Policy

Question 1

Which of the following is not a state-imposed revenue in Texas?

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

Answer 1

A

Question 2

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.

Answer 2

C

Question 3

The most significant, revenue producing, tax in Texas is the

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

Answer 3

A

Question 4

Texas has generally resisted balancing the budget by all of the following, except

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

Question 5

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 6

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 7

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

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

Question 8

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 9

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 10

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

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

Question 11

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 12

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 13

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.

Question 14

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 15

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.

Question 16

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 17

Which of the following entities in Texas is not funded by the property tax?

A) County government
B) State agencies
C) Municipalities
D) School districts

Question 18

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

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

Question 19

The largest portion of revenue for the State of Texas comes from

A) gambling and lottery funds.
B) federal grants-in-aid.
C) local property taxes.
D) various state taxes.

Question 20

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

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

Question 21

The state of Texas budgetary period is one of

A) one year.
B) two years.
C) three years.
D) four years.

Question 22

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 23

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 24

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 25

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 26

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 27

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 28

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 29

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 30

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 31

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 32

Texas may accrue a small amount of 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 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

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 35

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 36

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 37

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 38

For Texas, federal funds have historically made up what percent of state revenues?

A) 10-15 percent
B) 30-35 percent
C) 40-45 percent
D) 50-55 percent

Question 39

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

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

Question 40

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 41

Under the Robin Hood Plan, a Chapter 41 school is a identified as a

A) wealthy school required to help support a poor school.
B) poor school eligible to receive money from a wealthy school.
C) school that is not affected by the Robin Hood formula.
D) state exempt charter school.

Question 42

Health and human services funding in Texas is approximately what percent of state expenditures?

A) 10-15 percent
B) 30-35 percent
C) 40-45 percent
D) 50-55 percent

Question 43

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

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

Question 44

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 45

A high school graduate near the top of his or her class who took the recommended curriculum and who meets economic need guidelines can have his or her college tuition at state institutions paid from the

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

Question 46

The operation of instructional programs at most state universities is funded primarily by

A) student tuition.
B) legislative appropriations.
C) the Permanent University Fund.
D) the Available University Fund.

Question 47

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 48

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 49

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 50

All education funding in Texas is approximately what percent of state expenditures?

A) 10-15 percent
B) 30-35 percent
C) 40-45 percent
D) 50-55 percent

Question 51

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 52

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 53

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 54

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 55

Which of the following programs allows parents to lock in the cost of future tuition and fees at a state university or college?

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

Question 56

State accounts are audited under the direct supervision of the

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

Question 57

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 58

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 59

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 60

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 61

Describe the system of public school (K-12) funding in Texas. Describe the historic struggle between local school districts and the state to craft an acceptable system of school funding.

Question 62

Why do governments borrow money? In particular, describe the debt process in Texas, tracing its historic growth. Defend and criticize the various objects of public borrowing in Texas.

Question 63

Describe the system of public assistance in Texas, particularly as it applies to healthcare. Explain the degree to which Texas has made children a priority.

Question 64

Texas transportation policy has focused on and resulted in

A) an emphasis on mass transit over private motor vehicle use.
B) maintenance of existing highways over construction of new highways.
C) very little state money being spent in rural areas.
D) the construction of highways for use by automobiles, trucks, and buses.

Question 65

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 66

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

Question 67

The impact of Homeland Security on Texas has been mainly in

A) patrolling the border with Mexico.
B) combating drug cartels.
C) increased funding in the state's budget.
D) increasing the size of the Texas national Guard.

Question 68

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 69

Texas has sought to reduce the cost associated with state prisons by all the following, except

A) increasing sentencing terms.
B) encouraging education programs.
C) providing drug abuse counseling.
D) counseling to help transition to civilian life.

Question 70

Describe in detail 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.

Question 71

Texas relies heavily on non-tax revenues to meet its fiscal obligations. Identify and describe these non-tax sources of revenue. Which of these non-tax revenues could Texas least afford to lose, and why?

Question 72

Texas is said to have a regressive system of taxation. Explain the difference between progressive and regressive revenues. Give an example of each and explain their impact on different segments of society.

Question 73

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 74

Describe the history of highway funding in Texas. Identify problems associated with the current system and possible solutions.