Funding and budgeting

Question 1

Budget

Answer 1

The allocation and expenditure of funds to provide service to the public. A budget serves to set spending priorities.

Question 2

Operating budget

Answer 2

includes everyday expenditures of an organization, such as supplies, personnel, and maintenance of office space.

Question 3

Capital budget

Answer 3

Includes long-term purchases, such as a new building, recreation center, water main, or major equipment. A capital budget is a one-year budget for capital expenditures,

Question 4

Capital improvements programming

Answer 4

scheduling of selected physical plans and facilities for a community over a certain period of time, typically 5-7 years. Permit a long range forecast of expenditures.

Question 5

Line-item Budgeting

Answer 5

The emphasis is on projecting the budget for the next year while adding in inflationary costs. lacks flexibility and has a short-term focus. Not linked to CIP, comprehensive, or strategic -plans.

Question 6

Planning, Programming, Budgeting Systems (PPBS)

Answer 6

PPBS is focused on planning through accomplishing goals set by a department. Focuses on already defined long term goals. Time consuming to prepare.

Question 7

Zero-Base Budgeting (ZBB)

Answer 7

ZBB emphasizes planning and fosters understanding within all units of an organization.

Question 8

Performance-based budget

Answer 8

Performance-based budgeting is focused on linking funding to performance measures.

Question 9

Pay-As-You-Go

Answer 9

Uses current funds to pay for capital improvement projects.

Question 10

Reserve Funds

Answer 10

Funds that have been saved for the purchase of future capital improvements.

Question 11

General Obligation Bonds

Answer 11

Voter-approved bonds for capital improvements. GO Bonds use the tax revenue of the government to pay back the debt.

Question 12

Revenue Bonds

Answer 12

Use a fixed source of revenue to pay back the debt. For example, revenue bonds could be issued to pay for a new water main.

Question 13

Tax Increment Financing (TIF)

Answer 13

Allows a designated area to have tax revenue increases used for capital improvements in that area. Typically used for blighted areas.

Question 14

Value capture

Answer 14

A group of planning tools that secure societal benefits from increases in land value that happen because of investment in public infrastructure and/or regulatory changes.

Question 15

Special Assessments

Answer 15

Allows a particular group of people to assess the cost of a public improvement.

Question 16

Lease-purchase

Answer 16

Allows a government to “rent-to-own.” The benefit is that the government does not have to borrow money to finance the acquisition of a major capital improvement.

Question 17

Grants

Answer 17

Allow for all or a portion of the cost of a public facility to be paid for by someone other than the local government.

Question 18

Taxes

Answer 18

Used to generate revenue to finance government and redistribute income.

Question 19

Three types of taxes

Answer 19

1. Progressive
2. Proportional
3. Regressive

Question 20

Progressive taxes

Answer 20

The tax rate increases as income rises.

Question 21

Proportional taxes

Answer 21

The tax rate is the same regardless of income.

Question 22

Regressive

Answer 22

The tax rate decreases as income rises.

Question 23

Tax incentives

Answer 23

Favorable change or reduction in taxes. Used in order to attract economic development. This loss of revenue is known as a tax write-off

Question 24

Tax considerations - Fairness

Answer 24

A tax should reflect the ability to pay of those who bear its burden.

Question 25

Tax considerations - Certainty

Answer 25

A tax should be fairly applied (i.e., I know that every time I go to purchase a gallon of milk that I will be taxed at the same rate);

Question 26

Tax considerations - Convenience

Answer 26

A tax should be convenient to pay.

Question 27

Tax considerations - Efficiency

Answer 27

A tax should allow collection and enforcement to be a straightforward process

Question 28

Tax considerations - Productivity

Answer 28

A tax should provide a stable source of revenue

Question 29

Tax considerations - Neutrality

Answer 29

A tax should not change the way a government would normally use its resources.