lecture four: state budgeting - revenues and expenditures

what characterizes the texas state budget?

• written and approved by the legislature every two years (bi-annually)

• assumes a specific amount of revenue from sources

• directs hoe expenditures will be made

• state comptroller is responsible for providing the budget drafters with the official revenue estimate and spending caps for the next two years

how do projected flows of revenues get sorted?

• all revenues add up to total state revenue BUT can’t all be used —> split into dedicated revenue (FEDERAL MONEY, state debt, rainy day, bins-funds for pre-specified purposes)

• general is then hit by ESF and past overdues —> what they can actually spend

• making accurate predictions is TOUGH

how does texas compare in revenue sources withh other states?

texas receives a LOT more money from the federal government than other states

• over time, increases and changes aren’t always accurate becasue of the issue between CURRENT AND REAL DOLLARS —> doesn’t account for inflation

what is the trend for tax collection in texas?

• despite low spend state, texas is not a low tax state

• sales tax is BY FAR the highest tax in texas and other states —> makes up for the lack of income tax

what are common taxes used by the state?

• income tax

• sales tax

• property tax

• severance tax (depends on states resources)

• “tax shifting”

  -gains revenue for a state or locality by taxing people or entities outside of that state (hotels/high gas prices)

how do taxes compare between states?

• low property taxes at state level

• sales tax varies but highest in texas

• income tax varies but absent in some

• corporate generally lower from lobbying techniques

• OVERALL, varies between states