Budgets tax assessments and cost benefit analysis

You successfully incorporate all assumptions and data from the assignment and include information about average salaries gleaned from the district report card; no apparent errors.

Your discussion of the budget process and individual budget lines is set forth in a clear, thoughtful manner. It is well-written and insightful (writing demonstrates a sophisticated clarity, conciseness, and correctness); includes thorough details and relevant data and information; and is extremely well-organized.

Here are the lectures if you need:

Chapter Five

The money to fund the budgets adopted by government bodies has to come from somewhere. Taxes are the general means by which government accomplishes the budget funding mission. Many political arguments occur over the type of tax and amount of tax needed on any given jurisdiction. In this chapter, we will learn about the various forms of taxation. The sources of taxes never seem to end which causes many political debates during election time. The primary sources of taxes we will be discussing are property, sales, income, user, and some miscellaneous forms.

Property tax, commonly referred to as ad valorem taxes, are one of the primary sources of revenue for local governments. This form of taxation can account for 50 to 75 percent of the revenues collected for budget funding purposes. In this form of taxation property owners are taxed on real property, such as land, houses, and buildings. Different states have different means for calculating how much tax a property owner pays. In Florida, this rate is known as the millage rate, which is, so many dollars of taxes for each $1,000 of assessed property value.

Income tax is another form of taxation used by states. Florida does not have a state income tax and the establishment of such a tax is prohibited by the state constitution. Revenues from this form of taxation generally fund state budgets and on occasion may help fund county budgets. Here a person pays a percent of his/her earned income to the state government each year, much in the same manner as one pays federal income tax.

Sales tax is a tax on goods and services imposed by a state legislature. Here a percent is added to the goods or services purchased by the consumer. Since the State of Florida has no income tax, the sales tax is its primary source of revenue at the state level. Local governments in some states have also been granted the right to add an additional sales tax on top of the state sales tax if approved by local referendum of the voters. Florida is one of those states where local governments can add 1% local tax to the state sales tax in order to fund capital improvement projects. The projects to be funded must be clearly spelled out to the voters before any referendum is voted upon.

Use tax or user tax is an added tax of certain products, such as alcohol and tobacco. Other forms of user tax is fuel tax in every state and many local jurisdictions to fund road construction and maintenance. Entry fees paid to enter state or county parks is another example. Impact fees are another form of a user tax where the building of a new home or building is charged a certain amount for the impact this new construction will have on the community.

Other sources of taxation can include special assessments and franchise fees. Under special assessments a community may ask the local government to assess a tax on the community for a special service. Fire departments can charge a special assessment on property owners for fire protection services. A franchise fee is a tax added to a utility bill such as electric, telephone, cable, or satellite television. Here a percent is added to the monthly utility bill.

Chapter Six

In this module we will be discussing budget forecasting. The typical budget prepared is for one fiscal year period. What do public officials do to decide what to expect for more than just one year? Perhaps programs or functions within the one year budget depend on future fiscal year’s budgets to be successful. The hiring of personnel for which the organization has an expectation to keep from one year to the next is just one example. Salaries may be present in this year’s budget, but what about future years? Governments depend on budget forecasts to plan for the future. And those budget forecast are mostly revenue dependent.

Different governments use different methods to forecast. Of course, the larger the government the more complex the forecasting becomes. This chapter and the PPT touch on several of these methods. The federal government is extremely complex and as we work our way down to local governments the forecasting becomes less and less complex.

Much forecasting within local agencies at the local levels is found in the agency’s strategic plan. (In this program an entire course PAD 4332 is dedicated to strategic planning.) In brief, the strategic plan allows the agency chief executive officer to make multi-year plans for the organization first based on the agency’s needs, then on the projected revenues from the governing body. However, this does not always go as planned. Three year plans can be derailed by citizen initiatives limiting increases in taxation, thereby limiting revenues to fund future budget projections. Or, on the other hand, there may be unexpected new revenues from additional growth to a community or major commercial operations moving into the area.

As you move through this chapter look over the various forecasting techniques. The purpose of this module is not to make the student a forecast expert, rather to expose the student to the various methods that exist for government revenue forecasting.