Research Proposal on "Public Budgeting in America"

Research Proposal 16 pages (4933 words) Sources: 5 Style: APA

[EXCERPT] . . . .

Public Budgeting in America

Advisory Commission on Inter… #6

Property Tax #18

Real Property #15

Full Market Value #5

Replacement cost approach #20

Income approach #14

Uniform property tax assessment #16

State equalization rate #13

Income tax #8

Tax expenditures #10

Net taxable income #19

Sales tax #11

General sales tax #12

Selective sales tax #2

Place of delivery #1

Location of the vendor #17

Regressive quality of sales tax #7

User fees #3

Value-added tax #9

Circuit breaker #4

Tax expenditures are losses to the treasury that stem from loopholes, exemptions, credits or deductions to specific categories of taxpayer or activity. These are considered tax expenditures because rather than being a form of direct government spending, they represent tax that should have been collected by the treasury but was not.

Tax expenditures affect taxpayers in a number of ways. They represent a drain on the potential tax dollars. This reduces the amount of money that is available to spend in the public budget. This reduces the amount of services that government can provide. Additionally, tax expenditures may increase the propensity of government to borrow. The result is that the taxpayer then is forced to spend some tax dollars on interest payments, rather than on goods and services. Thus, the cost of capital for government increases. Another impact is that tax expenditures favor some types of activity over others. While some taxpayers and activities receive tax breaks, others are forced to pay higher taxes in order to make up for this shortfall. Tax expenditures therefore create a degree of inequity in the tax system, where some taxpayers are essentially subsidizing the economic activity of other taxpayers, whose activities are considered more favorable by the government.

Question 3.

The property tax system has come under fire for several reasons. One of these is that the system is based on assessed value of the property, which may or may not reflect the true market value of the property. Thus, a property owner may be faced with tax hikes based on assessments that have little bearing on the actual resale value of the property. There are circuit breakers, but they are not always set or set equally, to the detriment of some taxpayers.

Another issue is that the property tax rates are typically set by the civic authorities and can vary widely within the same state or region. This is in part because the local cost of infrastructure and other expenditures accounts for a significant portion of property tax and these costs can vary significantly throughout a region. While there are mechanisms to make property tax rates more equal statewide, such as state equalization rates, they are not always utilized to their best effect.

There are also inequalities in property tax when different approaches are used. For example, if an income-generating property is taxed using the income approach, this may leave the taxation rates out of line with the actual market value of that property. The use of different approaches can also result in benefit to some taxpayers, resulting in tax expenditures. These expenditures can be a drain on other taxpayers who do not have the ability to take advantage of the tax benefits.

Scholarly Activity 2

For this final project, I will be studying four different public budgets. For the federal budget component, I will study the Summary Tables for the 2010 budget, which can be found online here: http://www.gpoaccess.gov/usbudget/fy10/pdf/budget/summary.pdf.

For the state-level budget I am taking a look at the Florida "People's" Budget for 2009-10. This can be found online here: http://peoplesbudget.state.fl.us/bdagencies.aspx?full=1. For the civic budget, I have chosen the budget for Newark, New Jersey. The city's proposed 2009 budget can be found online here: http://www.ci.newark.nj.us/government/city_departments/department_of_administration/2009_proposed_budget.php. Lastly, the agency budget I have chosen is the Environmental Protection Agency (EPA) 2010 Budget. This can be found online here: http://www.epa.gov/budget/2010/2010bib.pdf.

Description of the Budgets

The summary tables of the 2010 Federal Budget break the budget down in a variety of ways, such that the information contained is easy to digest. The first summary is the Budget Totals, which illustrates the total receipts and outlays and their impact on the debt. The other tables summarize the budget in different ways, including the effect of budget proposals on projected deficits; the cost of various government programs such as the Department of Defense and Medicaid; and they break down both the mandatory budget activities and the proposals.

The table S-7 highlights the Funding Levels for Appropriated Programs by Agency. This table allows the reader to understand the level of funding that is provided for a variety of government agencies and departments. The budget shows the current level of funding, the additional funding under the Recovery Act, the request for 2010 and then the estimates of future funding levels of each agency and department. This gives the reader an understanding of the degree to which each department and agency contributes to government spending.

The budget tables also provide an indication of the economic assumptions behind the budget figures. The government provides this information because their revenue figures in particular are based on expectations with regards to GDP and therefore taxation. This information helps observers who can then make expected adjustments to the budget based on changes in the economic landscape.

Table S-9 illustrates the financing and debt that goes into the budget. This tells the reader where the money is going to come from to pay for the budget. In particular, the government shows the amount of unbudgeted deficit that will need to be covered by debt, and what those debt levels will look like into the future.

The Florida State budget is presented in a simpler manner. It highlights both the current year's expenditure on different agencies and the governor's recommendations for the next year's budget. For each agency, not only are expenditure levels available but the funding sources are outlined. The funds typically come from either General Revenue or Trust Funds.

The Department of Education funding is given special treatment as its funding is broken down further on a special chart by education type. Within each category for all agencies, expenditures are broken down by category and sub-programs. T

There are on the Florida State budget website a myriad of other reports that break down items such as sources of general revenue, the budget's underlying economic assumptions, and some of the trust fund sources. The trust funds for the state of Florida include an Education Enhancement Trust Fund, a Principal State School Trust Fund and a Tobacco Settlement Trust Fund.

The City of Newark's proposed budget is presented with a number of tables. The first of these highlights the city's revenue sources. The operating budget also highlights the expenditures for each agency and department within the city, including administrative departments, police, fire and engineering. The department budgets provided are fairly specific with respect to cost categories.

The smaller scale of the city budget allows for the presentation to include more than just overviews of the budget items. Each specific budget item is included in this proposed budget, which enables the reader to easily understand every expenditure and source of revenue that the city has. This is a very transparent budget.

The EPA's budget includes written descriptions of the budget, but also pie charts and graphs breaking down the different components. The budget is presented in two ways, by goal and by appropriation. This reflects the complex nature of agency budgeting. The agency receives funding from multiple different sources, including a variety of appropriations. For operating purposes, however, the agency sets its budget around particular goals, such as "clean and safe water" or "land preservation and restoration." Thus, the EPA's budget illustrates the disconnect between agency funding sources and agency tasks.

When breaking down the budget by goal, there are numerous sub-goals. For example, within Goal 1: Clean Air and Global Climate Change, there are six sub-goals. The amount of money allocated to each of these is explained in the budget. Extensive notes are provided explaining the nature of the work that the EPA is doing within each sub-goal.

In explaining the sources of funding, the budget illustrates the wide range of different funding sources that contribute to the agency's budget. It is difficult to determine the ultimate source of these funds, since many of the appropriations are simply transfers of federal funding to the agency.

The EPA budget also highlights the major changes in its budget from the previous year. Each new appropriation is categorized and the nature of the change is explained. The purpose for each appropriation is also explained in detail, so that the reader can easily track the purpose of each appropriation, even those of relatively tiny amounts.

The EPA budget also explicitly highlights the ways in which the Recovery Act impacts on the EPA budget. The levels of funding provided by the Recovery Act are outlined, as are the projects on which that money will be spent.

Similarities and Differences

Each of these budgets has some basic similarities, but there are… READ MORE

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