Question 1

Why must the Texas legislature maintain a balanced budget?

Accepted Answer

A)   It is required by the U.S. Constitution.
B)   It is required by the Texas Constitution.
C)   Each legislative session decides to balance or not balance the state budget.
D)   The Texas Office of the Comptroller writes the state budget.

Question 2

Due to the structure of the budget and the constitutional requirement to balance the budget,

Accepted Answer

A)   legislators are given a great amount of flexibility in terms of the budgeting process.
B)   legislators have only a few choices in terms of the budgeting process.
C)   the budget is easy to forecast each session.
D)   legislators generally raise taxes frequently to be able to increase the services offered by the state.

Question 3

Poor homeowners and renters generally pay more of their income in property tax than do the wealthy.

Accepted Answer

A) True 
 B)False

Question 4

The Texas Comptroller's Office is predicting declining receipts in the tobacco settlement account due to fewer people purchasing cigarettes.

Accepted Answer

A) True 
 B)False

Question 5

The bulk of federal funds expenditures is in two areas: health and human services and education.

Accepted Answer

A) True 
 B)False

Question 6

There is no mechanism available under the current budgetary system in Texas to shift monies between agencies or programs when the legislature is not in session.

Accepted Answer

A) True 
 B)False

Question 7

In addition to federal monies, which two other sources in recent years have had a major impact on monies flowing into the state budget?

Accepted Answer

A)   the alcoholic beverage tax and utility tax
B)   the inheritance tax and hotel tax
C)   the cigarette and tobacco taxes and motor fuel tax
D)   the state lottery and the settlement the state reached with tobacco companies

Question 8

The amount of money a state receives in federal matching funds is based on the amount a state spends on a particular program.

Accepted Answer

A) True 
 B)False

Question 9

What is the argument commonly used by supporters of a state income tax?

Accepted Answer

A)   It will probably be quite regressive.
B)   It is a fairer but highly unreliable source of revenue.
C)   It makes Texas more attractive to businesses that are considering relocating from out of state.
D)   It is a fair and more reliable source of revenue.

Question 10

________ is a non-dedicated revenue account and is the state's primary operating fund.

Accepted Answer

A)   The General Revenues Funds budget
B)   The General Revenue-Dedicated Funds budget
C)   The Federal Funds budget
D)   The Other Funds budget

Question 11

How does the Texas Constitution shape the budget? What budgetary requirements or restrictions are found in the Texas Constitution? Do these restrictions help or hurt Texas in today's competitive business environment? Are there any problems with these restrictions for a rapidly growing state?

Accepted Answer

a. Time limits: Two-year, biannual budge...

Question 12

A ________ is a tax on the market value of oil produced in the state.

Accepted Answer

A)   general sales tax
B)   selective sales tax
C)   severance tax
D)   hidden tax

Question 13

Explain the strengths and weaknesses of the budgetary process in Texas.

Accepted Answer

a. Strengths: The state constitution man...

Question 14

In the first stage of the budgetary process, the governor's office develops a draft budget based on requests from state agencies.

Accepted Answer

A) True 
 B)False

Question 15

Compared to other states, Texas tends to spend a relatively small amount of money on programs that are jointly funded by the state and federal governments. Because of this,

Accepted Answer

A)   Texas is ineligible for any matching funds because they are distributed only to the largest contributors.
B)   the amount of money that Texas receives in matching funds and grants from the federal government is relatively low as compared to other states.
C)   Texas receives a higher than average amount of money from the federal government in grants and matching funds compared to other states.
D)   Texas shares a pool of funds with other states that are designated as "low-level" contributors.

Question 16

The purpose of the Biennial Revenue Estimate is to provide

Accepted Answer

A)   a detailed forecast of total revenues that the state is expected to take in over the next biennium.
B)   a detailed forecast of expenditures the state expects to be obligated for in the two-year budget cycle.
C)   a detailed forecast of the estimated federal funds the state can expect to receive during the two-year budget cycle.
D)   the governor a detailed estimate of the likelihood of a balanced budget during the two-year budget cycle.

Question 17

The Permanent School Fund distributes money to school districts across the state based on what two factors?

Accepted Answer

A)   the number of schools in a district and student attendance
B)   student attendance and guaranteed bonds issued by local school boards
C)   the number of teachers and test scores
D)   teacher availability to student ratio and test scores

Question 18

Who pays the greatest portion of their income in property taxes?

Accepted Answer

A)   business owners
B)   wealthy homeowners and renters
C)   poor homeowners and renters
D)   renters

Question 19

Much of the money in the state budget lies outside the direct control of the legislature.

Accepted Answer

A) True 
 B)False

Question 20

The Legislative Budget Board is chaired by

Accepted Answer

A)   the comptroller of public accounts.
B)   the governor.
C)   the lieutenant governor.
D)   the land commissioner.

Exam 11: Public Finance

A ________ is a tax on the market value of oil produced in the state.

Correct AnswerverifiedShow Answer

Why must the Texas legislature maintain a balanced budget?

Correct AnswerverifiedShow Answer

Explain the strengths and weaknesses of the budgetary process in Texas.

Correct Answerverifieda. Strengths: The state constitution man...View AnswerShow Answer

________ is a non-dedicated revenue account and is the state's primary operating fund.

Correct AnswerverifiedShow Answer

The Texas Comptroller's Office is predicting declining receipts in the tobacco settlement account due to fewer people purchasing cigarettes.

Correct AnswerverifiedShow Answer

The purpose of the Biennial Revenue Estimate is to provide

Correct AnswerverifiedShow Answer

Much of the money in the state budget lies outside the direct control of the legislature.

Correct AnswerverifiedShow Answer

There is no mechanism available under the current budgetary system in Texas to shift monies between agencies or programs when the legislature is not in session.

Correct AnswerverifiedShow Answer

How does the Texas Constitution shape the budget? What budgetary requirements or restrictions are found in the Texas Constitution? Do these restrictions help or hurt Texas in today's competitive business environment? Are there any problems with these restrictions for a rapidly growing state?

Correct Answerverifieda. Time limits: Two-year, biannual budge...View AnswerShow Answer

Who pays the greatest portion of their income in property taxes?

Correct AnswerverifiedShow Answer

Poor homeowners and renters generally pay more of their income in property tax than do the wealthy.

Correct AnswerverifiedShow Answer

The Permanent School Fund distributes money to school districts across the state based on what two factors?

Correct AnswerverifiedShow Answer

What is the argument commonly used by supporters of a state income tax?

Correct AnswerverifiedShow Answer

The Legislative Budget Board is chaired by

Correct AnswerverifiedShow Answer

The amount of money a state receives in federal matching funds is based on the amount a state spends on a particular program.

Correct AnswerverifiedShow Answer

The bulk of federal funds expenditures is in two areas: health and human services and education.

Correct AnswerverifiedShow Answer

In addition to federal monies, which two other sources in recent years have had a major impact on monies flowing into the state budget?

Correct AnswerverifiedShow Answer

Due to the structure of the budget and the constitutional requirement to balance the budget,

Correct AnswerverifiedShow Answer

In the first stage of the budgetary process, the governor's office develops a draft budget based on requests from state agencies.

Correct AnswerverifiedShow Answer

Compared to other states, Texas tends to spend a relatively small amount of money on programs that are jointly funded by the state and federal governments. Because of this,

Correct AnswerverifiedShow Answer

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a. Strengths: The state constitution man...
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a. Time limits: Two-year, biannual budge...
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