Texas Seeks To Maintain A Favorable Environment For

Chapter 11- Public Finance in Texas

1. What did the UT System Board of Regents decide in May 2014? 348Not to raise tuition for in-state students, provisions to raise out-of-state tuition, that the Board allocate monies to UT Austin from the state’s Permanent University Fund, and that universities were allowed to approve optional four-year fixed tuition programs
2. Prior to 2003, who set the tuition for public colleges and universities in Texas? 347State legislature
3. Prior to 2003, how would you describe tuition rates for public colleges and universities in Texas?Very low
4. Following a legislative decision in 2003 to reduce state funding to higher education, which source of university revenue began to increase most rapidly?Student tuition and fees
5. Why must the Texas legislature maintain a balanced budget?The state constitution mandates a balanced budget
6. Describe General Revenue-Dedicated FundsBudget for a non dedicated revenue account that functions as the state’s primary operating fund
7. Given the budget structure and constitutional limitations upon spending and taxing, legislators seeking to balance the budget are left with (complete) __?
8. Federal money is an important part of the Texas budget, but monies that Texas receives from the federal government (complete) __?Often comes with strings attached, which is mainly that Texas must spend a certain amount of their money before the federal money will be given
9. Federal funds appropriated in Texas generally are (complete) __?
10. What reputation does Texas have? 351Low service, low tax state
11. Texas seeks to maintain a favorable environment for (complete) __?Businesses
12. How much is Texas spending on a per capita? 354$1,000
13. In 2012, how did Texas rank when compared to other states on the per capital federal dollars?46
14. Is there is a high sales tax in Texas? What is the __ percent? 355High; 6.25%
15. Which is the single largest source of tax revenue for the state of Texas? 355Sales tax
16. According to our text, what determines the amount of tax revenue generated from oil and natural gas produced in Texas? 356Price and amount produced
17. The revenues flowing from the motor fuels tax are dedicated to (what) __? 356Construction, maintenance, policing of public roads, and public education
18. Overall, what does the tax system in Texas generally considered to be__? which means __? 358Regressive. Which means that the tax burden in the state falls more heavily on lower-income individuals
19. Who pays the greatest portion of their income in property taxes? 358Poor homeowners and renters
20. What generally are considered to be an example of regressive taxes or fees?Sales and use taxes
21. What is the argument commonly used by supporters of a state income tax?Supporters argued that not only is the income tax a more reliable source of revenue for the state, it can also be made fairer
22. If Texas instituted a progressive income tax, what would happen __?The people with lower income will pay a lower tax rate than people with high income
23. Texas will never have a personal income tax in the future, why __?Few politicians have been willing to support an income tax. One of the attractive features of Texas to business has always been the absence of an income tax. An amendment was passed in 1993 that required voter approval of any personal income tax and that funds raised under the tax be used to support public education.
24. Next to revenue generated by state taxes, where does the second-largest source of state revenue come from? 360The federal government
25. In addition to federal monies, which two other sources in recent years have had a major impact on monies flowing into the state budget? 360Lottery (1991) and tobacco settlement (1998)
26. Describe federal matching funds 360Federal monies going to a state based on state spending for a program
27. What is true regarding state-federal spending in Texas? 360Texas spends relatively little, compared with other states, for state-federal programs. As a result, federal grants and matching funds also have been low
28. What is true statement concerning matching funds in Texas? 360Texas has historically participated in matching funds at a relatively low rate
29. Authorized by voters in 1991, the Texas state lottery generates a sizeable sum for the state budget. What is true statement regarding the Texas lottery? 360The lottery is played by large numbers of people from all social classes
30. The Permanent School Fund distributes money to school districts across the state based on what two factors. List them?Attendance and etc.
31. When (in what year) was the Permanent School Fund created? 3621854
32. What is the main purpose of the Permanent School Fund? 362To fund primary and secondary schools
33. What entity determines how much money is available to public education through the Permanent School Fund? 362The State Board of Education
34. Available School Fund (definition)? 362Dedicated fund established by the constitution for the support of public education in the state
35. What is another name for “Economic Stabilization Fund”? 362Rainy Day Fund
36. The Permanent University Fund was established in 1876 with a land grant of 1 million acres. It contributes to the support of (what) __? 365Most institutions in the University of Texas (UT) and Texas A&M University systems
37. What was the purpose for the establishment of the National Research University Fund? 365To provide a source of funding for universities seeking to achieve national prominence as research institutions
38. For universities to be eligible for the National Research University Fund they must meet certain criteria. List them. 365Maintain an endowment of at least $400 million in two preceding academic year. Produce 200 Ph.D. degrees during previous two years. Have a freshman class of high academic achievement. Be designated as a member of the Association of Research Libraries, have a Phi Beta Kappa. Have a certain number of tenured faculty who have demonstrated excellence by winning a Nobel prize or other prestigious fellowships, or have been elected to one of the National Academies. Have a demonstrable excellence in graduate education
39. What is one significant component of the budget process that is relatively unique to Texas? 366Pay-as-you-go limit (Article 3, Section 49a)
40. Who is at the heart of the budget process in Texas? 366The comptroller
41. What percent of the state budget that Texas Constitution specifies for assistance to needy children and their caretakers? 3661%
42. In theory, Texas has a dual-budget system, meaning the budget authority is shared by the governor and the legislature; however, in practice, who is (are) the primary player(s) in the budget? 369The legislature
43. Who are key players in the budgetary process? 370The Legislative Budget Board (LBB), the governor and the Governor’s Office of Budget, Planning, and Policy (GOBPP), and the comptroller of public accounts
44. What is the purpose of the Biennial Revenue Estimate?Detailed forecast of the total revenue that the state is expected to take in over the biennium
45. Nationally, what two factors caused the bubble in the real estate market?Low interest rates supported by the Federal Reserve policy and loose credit standards
46. During the 2011 session, why was this legislative session particularly difficult? 373The legislative session was particularly difficult because of the budgetary choices that would have to be faced due to the Great Recession. For 2 years, Texas had dodged the worst effects of the Great Recession. But in 2011, hard decisions were going to have to be made to balance the budget.
47. When compared to the rest of the nation, how was the real estate collapse in Texas?Less severe
48. To help compensate for lower property tax revenue in the 2012-2013 budget cycle, what action the Texas legislature took?Increase the state corporate franchise tax and the cigarette tax
49. What action forced the legislature to bring the 2012-2013 state budget into balance?A special session of the Texas legislature voted for a balanced budget
50. To address the budget shortfall in the 2012-2013 budget, what was the most common tactic used by the legislature? 375Reducing spending
51. According to the text, just as the economy began to improve and state revenues started increasing, what was the new threat that arose to threaten the newly balanced budget?Increasing healthcare costs due to recent efforts to reform the health care system
52. From an overall standpoint, what is a relationship between the Texas and the national economy?TX economy is closely tied to the national economy