penis delirious

regulation

rules that prohibit or require actions, exist at municipal/state/county/federal levels, exist as ordinance and code in municipalities and statutes and rules in states

legislative actions tend to

lean more towards ambiguity, precision often used to control the bureaucracy

rulemaking process

rulemaking hearing announced → notice published → rulemaking hearing → adopt rules → attorney general review → adopted rules filed → rules published → rules become effective

how regulation works

federal governments regulate directly and through creative federalism

states regulate with primacy and directly

municipalities regulate directly as allowed by state

capacity of government is often dependent on

diversity of revenues and interdependence (state and local govs rely heavily on intergovernmental transfers to supplement own source revenues) - intergovernmental revenues make up a smaller portion of budgets than they ever have

taxes

count as own source revenues for the jurisdiction they are collected by

when states collect tax revenues they often redistribute those funds to localities as an intergovernmental transfer

key taxes

federal: income tax + excise taxes, corporate taxes

state: sales tax + excise taxes, income tax, corporate taxes, payroll taxes

local: property tax + sales tax, development taxes

five principles of taxation

equity - is a tax regressive or progressive

yield - how much do taxes provide in revenue compared to the cost to administer

elasticity - do yields vary widely with economic conditions i.e does improving economy result in a higher yield

accountability - are revenue sources clear and understandable

political feasability/acceptability - will the public accept a tax

progressive tax

higher income individuals pay more of their income towards taxes than lower income individuals

regressive tax

lower income individuals pay a higher effective tax rate

sales tax

as a PERCENT of purchases

property taxes

collected based on mill levy (.001 is 1 mill, meaning 100k home would be charged 100)

when you vote on a levy you are voting on a property tax continuation or increase

income taxes

as a ratio of federal taxable income or bracketed by incomes

marginal rates - rate paid on last dollar, not effective rate i.e if you make 100$ a year

2% x 50 + 5% x 25 + 10% x 25 = 4.75 in taxes

corporate taxes

income taxes on corporations

have not grown despite economic growth

debt

debt service - paying of the principal and interest for government bonds

debt capacity - how much can a government afford

debt limits - legal limits on how much debt can be issued

debt affordability - can a jurisdiction repay its principal plus interest based on revenues

long term borrowing

general obligation bond - a debt instrument supported by the full financial resources of the issuing jurisdiction

revenue bond - a bond paid off from income derived from the facility built with the bond proceeds

industrial development bond - bond issued to fund the construction of a facility to be used by a private firm

qualified private activity bond - a tax exempt state or municipal security issued to a private firm used to finance a project/facility

bonds are sold in private markets

unaffordable debt/defaulting

might prevent you from issuing new bonds in the future

those bonds if issued would have a much lower bond rating

this means jurisdictions would pay a higher interest rate to cover the greater risk of default to investors

thus is a worst case scenario for governments

storing money in funds rather than investing in capital can

help provide a bridge in times of unexpected revenue downturns but storing money in cash funds can prevent investments in capital assets or services for citizens this is the fundamental purpose of local governments

tax revolt

push against expansion of government in 1990s, generally called tax revolt but less about reducing taxes and more as limiting power of legislature to enact new taxes and limiting power of local governments to levy taxes

tax and expenditure limits

TELs; limit taxes and expenditures

TABOR

voters must approve revenue increases, TABOR limits revenue growth (otherwise refund) and limits expenditure

TABOR workarounds

debrucing - get rid of expenditure limits without rebate at local level (roughly 90% of municipal/school district debrucing bills have passed)

rely on fees for service; fees not a tax therefore the legislature can increase fees without voter approval

operating and capital budgets

operating budget

* functions and services of government
* employees / FTEs
* materials (paper, trucks, phone service, etc)
* debt service
* funded based on revenues

capital budgets

* long term investments
* facilities improvements
* funded based on bonds, grants, loans

costs

direct - attributable to one service

indirect - attributable to multiple services

full - direct and indirect costs

fixed - do not vary with the amount of service provided (a copier)

variable - cost that varies in proportion to service (paper)

cutback management dilemma

whether to stand firm in the face of adverse public opinion or to follow through with cuts that will compromise organizational capacity for the present and perhaps disproportionately in the future

cheese slicing

everyone contributes to share of cuts, specific cuts up to individual cost centers/departments and specifically program leads within costs centers, egalitarian but politically divisive, incentivizes fattening budgets

efficiency gains

do more with less, sounds not very threatening and modern, tends to align with performance and management reforms; innovation necessary, hopeful but not practical as single solution

priority setting

strategic, protects most effective programs, politically disadvantages leaders, possible for interactions and unforeseen consequences

long run thinking vs short run thinking / problems with managing hard times

* cheese slicing tends to ignore long run potential gains
* efficiency improvements and priority setting can help streamline government, especially if they are adopted with a long range mindset
* long term - capital projects can save money, new programs can increase fees based revenues, drawing down reserves temporarily can allow long run goal maintenance

steps of policy analysis

* problem definition
* objectives/goals
* determine criteria
* select alternatives
* evaluate alternatives
* make recommendation

which kind of tax is commonly used because it is low cost for administrators

sales tax

which kind of tax is commonly used because it best promotes stability in revenue

property tax

which kind of tax is commonly used because it best promotes vertical equity

income tax

Under a graduated income tax system, a 30% marginal income tax rate on earnings at or above $1,000,000 means that an individual earning $1,000,000 would pay $300,000 in taxes

false

In Colorado, taxes are 4.6% of federal taxable income. This means that 4.6% of every dollar earned in Colorado goes to the State.

false

a budget is best described as

a plan

across the board cuts consequences

inflated base budgets

cuts to quality programs

perceived as equitable

do more with less consequences

unrealistic, overworked employees, reduced quality of services

the city of loveland decided to cut their auditors. this is

a problem because auditors often increase revenue for cities

local governments and states

must balance their budgets but rely on intergovernmental transfers to do so

policy analysis most clearly refers to

generating and comparing policy ideas

science is used in policy analysis in order to

identify possible solutions, measure outcomes, predict impacts