State Budgeting Issues

The complexity of the relationship between the federal government and states government arise it dealt with national issues. In the recent events the federal government has been heavily involved with people’s lives notably when it comes to national issues. For instance, in the 1930s when America faced the Great Depression the States had to turn to the Federal government to solve the issue and New Deal program was introduced. The New Deal program that was introduced by Franklin D. Roosevelt solved the macroeconomic problems that United States faced from the Great

Our political leaders struggle to understand the impact they have on the policies they put into place to improve public education. We see mandates that are unfunded and have a significant impact on a school district’s budget. Special education continues to be an area rich with policy and yet additional dollars are not included in the decisions made for implementation. Title one funding is an area that falls into a blurry area of policy for school districts. In our district, we have policies for fiscal responsibility in our spending procedures and yearly audits to be sure we are spending our money in a proper way.

Over the past five years, the federal government has also found it difficult to measure “improvement” in states. Currently, success is based in terms of job entry rate or increases over time in job entry rate, retention rate, and earnings gain. States may use quarterly unemployment insurance wage records, surveys, administrative records, or a combination of those data sources. States are given wide latitude in the sources of information they report. Also, to further distort the findings, there is no baseline data with which to make comparisons (Danziger, 2000).

The main difference between the federal budget and the state and local budgets is the issue of a monetary deficit, in which expenditures in the budget exceeds revenues that were estimated. State and local governments are required to balance their budgets. The federal government is allowed to borrow money to meet its obligations and have a deficit. The federal government collects the most tax revenue, but state and local governments have a greater range of revenue options for funding their budgets. The federal government relies mainly on income taxes, capital gains and Social Security taxes. State and local governments collect sales taxes, taxes on fuel, property taxes and fees from special licenses and permits. Also, many state and local

Although the federal government declared that the “Great Recession” had hit its low regression and the hoped-for economic recovery had begun in December 2009, California continued to suffer from the ill effects of the financial blow.

15. What are your thoughts of the importance of understanding the per patient day (PPD)

There are some differences and similarity between the State and Federal budget. The Federal budget is bigger than the State budget. The federal government have the sovereign bank. The Federal government have the ability to print additional money when the need arises. The federal budget needs not balance revenues and expenditures for each fiscal year. At the subnational level, appropriations must not exceed revenues in the State budget. This creates restriction which is mandated for almost all the state and local finances. “This imposes a discipline at state and local government which the federal government may chronically evade. States cope by setting aside reserves in good years to hopefully cover deficits in bad revenue years” (n.d., 2012).

California’s comeback from the financial ruin during the Great Recession is the best thing that could have happened. Not like other states where they prefer cutting education. (Smith). In other states they prefer funding other programs/organizations and losing a few weeks of school. California is particularly vulnerable to economic downturns because it relies heavily on taxing the wealthy, whose incomes rise and fall with an unpredictable stock market. (Chris Megerian). In these 12 years to come with proposition 55 running there could be times when the wealthiest Californians would be making less but others making more. In cases like those the people making more would have their taxes

As mentioned by Thompson (2010), in the Associated Press, “Lawmakers bridged a $19 billion shortfall, more than 20 percent of the $87.5 billion general fund spending plan”. This shows that the state was heading towards a financial crisis and more deficit creation. Moreover, Thompson (2010), in the Associated Press also points out that “It includes no tax or fee increases but uses a combination of cuts, funding shifts, delayed corporate tax breaks and assumptions about money the state hopes to receive”. The budget gave rise to other dependent costs such as delayed tax refunds. It was uncertain that the State will receive the required funds from the federal government to ensure that the important programs will function the way it used to be until the funds are received.

At the end of the Great Recession in June of 2009 Massachusetts had an unemployment rate of 8.3% and Connecticut had a rate of 8.1%, very similar. When came down to recovery from the recession Massachusetts was on money on getting their jobs back. According to MassBudget.gov is had stated that “Massachusetts has maintained lower unemployment rates than the US throughout the duration of the Great Recession and its aftermath.” One reason why Massachusetts had a faster recovery than Connecticut is because Mass didn’t lose a lot of jobs during the recession. Also while recovering from the recession, not only they recovery all their jobs they lose, they kept adding more jobs. Their biggest industries are health care and education in creating more jobs while construction are creating less jobs. Massachusetts really had a fast recovery after the Great Recession. According to Gioia (2016) “Massachusetts and Connecticut are on widely divergent paths in their respective recoveries from the great recession. While Connecticut continues a slow and painful slog to get back lost jobs, Massachusetts is surging ahead.” Gioia is right because Connecticut is struggling while Massachusetts keep on winning and improve their

The U.S has gone through a major economic struggle and is still fighting for stability. It is, also, undergoing a recession which occurs whenever gross domestic product and the total output of goods and services fall for two consecutive quarters. The 789 billion dollars stimulus package has not created many private sector jobs and the hundreds of billions in TARP money squandered by Treasury Secretary Geithner to bail out General Motors, Chrysler, Bank of America, AIG and Citigroup has not reached most business and working Americans (Peter Morici). Though the unemployment rate has decreased, it is because many Americans have stopped looking for jobs and are no longer in the unemployment rates. This, of course, does not show any improvement in the U.S economy. Most of the taxpayers’ money is being used to support illegal families with American-born babies; while, many illegal Mexicans are taking jobs from citizens who are desperately searching for jobs. With this unattended problem the country’s economical repair will be prolonged.

Fiscal policy: Given the breadth and depth of this recession, it was clear that the Treasury and the entire Obama administration had to take bold actions. In fact, right at the beginning, they were committed to a fiscal stimulus policy package which would be “substantial” enough to pull the economy out of the recession. The final stimulus package signed into law in 2009, the American Recovery and Reinvestment Act, was totaled $787 billion including about one-third tax cuts and one-third aid for states and the unemployed. Of the rest, labor health and education investment got 8%, and infrastructure investment got about 7%. It also included a large amount of government money to

The unprecedented government intervention during the massive economic crisis of the late 2000’s was met with varied sentiment of economists (Lee, 2009). For example, economist Marci Rossell felt that government intervention was arbitrary and lacked clarity as to which firms would receive government aid (Lee, 2009). She furthered her argument by stating that if the government bailed out homeowners and banks that were borrowing and lending “over their heads,” they were creating a dangerous precedent to set (Lee, 2009, p.40). However, Rossell praised the Obama administration for having a clear grasp on the economic situation and trusted in this administration’s guidance to recover from the economic crisis. Conversely, economist Steven Schwarcz said that though the government bailout in 2008 would cost more than it would have if the government had reacted more swiftly to early signs of recession, these institutions would collapse and fail without government aid (“How Three Economists,” 2008). If these institutions failed, the ripple effect of this failure to the U.S. economy would be irreparable.

In these current economic times, people have lost jobs. People have lost faith in the economy since the worth of their money keeps falling. Businesses are failing left and right because of the lack of confidence in the system. Banks have folded because of the amount of people who are unable to pay their loans, leaving the banks without funds. The auto industry is failing as people cannot afford the new cars being produced by Detroit. Confidence in the economic system of the United States is very low. How can the country recover from this economic recession? Some economists would say that the government should step in to save the day by pumping funds into the system. President Obama signed a massive stimulus bill in an attempt to turn the

A more challenging economy is reducing tax revenues and the demand for our services, which is leading to tighter budgets for most of the governmental agencies like