POLS207 class 2

5 advantages of multiple levels of gov

efficiency, equity, participation, protection against tyranny, choice

efficiency in gov

tailored to local needs

equity in gov

those who pay also benefitt

participation in gov

local decisions affecting local decision makers

protection against tyranny in gov

difficult to usurp power from dispersed power centers

choice of gov

relocation can resolve conflicts with previous state/local goverance

‘no gov’ period (1776-1850)

most americans lived in rural settings (self dependence), county officials were faces of government, ‘best gov was least gov’ most common attitude

‘municipal government’ period 1850-1895

americas cities swelled as nation changed, populations demanded large scale services (water, sewage, crime), political corruption became rampant in every major city, new ideas rose and elections were strong

industrial revolution

factories required huge amount of labor

immigration

large influx of immigrants came from europe

urbanization

bulk population began shifting to cities; led to new large scale problems arising from congestion

‘state intercity’ gov period 1895-1932

opens with political corruption still rooted in cities, state gov acted to impose changes using dillions rule

dillons rule:

local gov are creations of state, so must comply with state statues

‘federal gov’ era (1932-1981)

us gov working to help nation recover after america dropped off econ cliff into great depression, ww2, fed gov took on roles of guardian (provided income for elderly, labor back to work), feds imposed national standards supremacy over state laws, fed taxation and federal spending gave feds the tools they needed to move into areas where states had previously exercised sole jurisdiction

federalism-

points to method of allocation of powers between top and lower level governments

new federalism was attempt to reset allocation to better favor states based on…

decisions and size of government

new federalists expected large transfers of fed powers back to ___

states

federal gov responsibilities…

national defense, space program, postal service

state gov responsibilities…

education, highway and transport, health, fire, police

shared gov responsibilites

welfare, employment services, unemployment compensation

CATOS 8 reasons to cut federal aid to states

No magical source of federal funds, Grants spur wasteful spending, Aid allocation doesn’t match any consistent idea of need, Grants reduce state policy diversity, Grant regulations breed bureaucracy, Grants cause policymaking overload, Grants make government responsibilities unclear, Common problems are not necessarily national priorities

purposes of constitution

Legitimacy (origin of power), Organizing government, Allocating power in government → checks and balances, Limiting governmental power

key similarities with US constitution-

Delegates to Constitutional Conventions brought state examples; Much-lauded federal system was not original—first appeared in 1780 state constitution of Massachusetts

differences of checks and balances

Post Colonial Period: States’ approaches often shifted toward making governors weaker

Post Civil War: States’ residents (that could vote) wanted

shortest state constitution

new hampshire

longest state constitution

alabama

hierarchy of constitutions

1.Constitution

2. State statutes

3. Local government ordinances

why has southern states have so many diff constitutions?

secession, ‘war against states’, reconstruction, white power returns

objectives of tx constitution

avoid abuse of governmental powers and protect various private interests

whats deadwood?

Unenforceable provisions that conflict with U.S. Constitution

what is supreme law of the land?

US constitution

all public goods are…

non-excludable and non- rivaling– everybody can use without denying to others

SOME public goods are…

merit goods- goods in which should not be denied to people who cannot pay for them like education, transportation, healthcare

all private goods are..

excludable and rivaling- only those who pay gets the goods

revenue:

income received by the government

expenditures:

goods and services purchased or provided with gov funds

gross domestic product:

commonly used to measure the size and health and power of economy of a nation (measured annually)

gross-

everything, all encompassing

domestic-

not internationally

product-

goods and services created/provided in specific year

GDP tells us nothing about…

econ health of individuals

most common sources of state gov revenue

taxes, federal grants, fees and licenses, interest on investments

tx state budget is written

every 2 years and assumes specific amount of revenue from various sources

do we have income tax in texas?

NO

severance tax:

applies to minerals severed from land

tax shifting-

gains revenue for state or locality by taxing people or entities outside that locality

what is taxation?

one of several gov revenue streams used to purchase public goods and services

taxes are based on ‘ability to pay’ model—-

those who have to pay the costs; those with more pay more

how do taxes redistribute some wealth?

uses money to provide services leading to tax decisions which are made by states and local residents

what taxation is NOT-

based on user pay model

are taxes required if there are public goods?

YES

normative means…

what should be right

we win with taxes when

we pay less but get more, redistribution is to us not from us

tax base=

item/amount subject to taxation

tax rate=

percentage set by legislature

fixed tax rate=

same rate independent of base

tax bill=

taxes paid in year by person or business

total value=

total income, total value of property etc…

tax burden=

measure that takes tax bill of person or corporation and folds in consideration of their ability to pay

tax burden is

tax bill/ total value

progressive tax rate-

higher the base, higher the rate

tax incidence:

characterizing tax burdens across range of incomes

progressive rate-

the more you make the more you pay

flat rate-

everyone pays the same proportion

regressive rate-

the less you make, the more you pay

Income tax

Base- Personal or corporate income subject to taxation

Rate- Progressive

Incident- Widely accepted as progressive, although not nearly as progressive as some think it should be

Revenue predictability- moderate

Sales Tax

Base- sales subject to taxation

Rate- fixed

Incident- regressive

Revenue predictability- low

how can property taxes be regressive?

less regressive than sales taxes Yet the same principal applies: the wealthier don’t usually own expensive enough property so that their property taxes ever equal the same percentage of income as middle and lower-income families

pay as you go…

Total appropriations for government operations can’t exceed biennial revenue estimate made by state comptroller

Property Tax

Base- wealth

Rate- flat

Incident- regressive

Revenue predictability- highest

what does equity ask?

Do residents get the benefit from what they paid for? Did residents pay for the benefit they are now getting?

pay as you go:

new building funded by current revenues (paid cash) — some pay, and don’t get, but some get and don’t pay

pay as you use:

new building funded by bonds sold with last 40 years— those who pay, get.. those who get, pay

high levels of local debt by the state leaders-

Local leaders are poor fiscal managers

Taking on unnecessary and excessive risk for residents

high levels of local debt by local gov-

Absolutely necessary to provide for real needs

Population growth & aging infrastructure and State doesn’t offer much money to help pay these bills

Low risk (almost “free” money”) due to extremely low interest rates at present time