A. Short answers (35 points total): These questions require clear-cut answers with mostly descriptions and less...
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A. Short answers (35 points total): These questions require clear-cut answers with mostly descriptions and less elaboration. 1. (15 points) California's FY2012 budget includes the following chart that illustrates the shares of taxes paid by various income classes. In 2008, the top 15.6% of state taxpayers, those with adjusted gross incomes (AGI) over $100,000, paid 83.6% of the personal income tax. The top 1% of state taxpayers paid 43% of the personal income tax. What does this chart say, or not say, about the progressivity of the tax? Define revenue progressivity first, and then explain. 90.0% 80.0% 70.0% 60.0% 50.0% 40.0% 30.0% 20.0% 10.0% 0.0% Figure REV-03 Percent of Taxpayers and Percent of Tax Paid by Adjusted Gross Income Class 2008 State Tax Data Percent of Taxpayers □Tax Paid $0-20 $20:30 $30-40 $4050 $50-100 $100+ Adjusted Gross Income Class (Dollars in Thousands) Dr. Rui Sun 2. (10 points) How public goods, private goods, toll goods and common-pool goods differ from each other? Describe their characteristics and give at least two examples of each type of goods. 3. (10 points) Explain balanced budget requirements (BBR). What are other forms of legal constraints that affect state and local government finances? Describe them briefly. B. Long answers (65 points total): These questions focus on the application of class readings to real- world situations. Answers could vary. A successful answer requires more in-depth analyses and elaborations with theoretical discussions and practical examples or data. 1. (25 points) Several states have declared sales tax holidays, in which the state does not collect sales tax on certain items for a short period of time. In most instances, the holiday has been for clothing, and the period has been a week or ten days in August, the idea being to give a "back-to- school" discount as families get ready for the new school year. However, states have gotten more adventurous with the idea in recent years and have enacted or proposed holidays for hurricane survival supplies, gasoline, Energy Star appliances, and guns and ammunition. Analyze the idea of such holidays according to (1) yield, (2) equity, (3) administration and compliance, and (4) economic impact. 2. (20 points) Fighting wildfires is expensive. Global climate change seems to have worsened the conditions for wildfires in the American west. To help pay for the cost, in 2011, California started to impose an annual "fire prevention fee" from property owners in wild land areas where the state has responsibility for providing fire protection. a. What are the general methods that a state would use to finance state services (e.g., education, transportation, social services, and so forth)? For example, sales taxes, user charges, etc. Explain these financing methods. (5 points) b. Does financing this wildfire fighting through user charges make sense? Discuss this alternative as opposed to using general funds. What are the advantages and disadvantages of each approach? (10 points) c. Can you think of a better solution? Describe your solution. (5 points) 3. (20 points) The data in the following table present expenditures for a police department in a Southeastern city. a. Identify the budget-classification system (such as line-item, performance, or program budget, etc.) used in this budget document. (2 points) b. Compare and contrast this classification with at least two other alternative classification systems in terms of their organizational features, budgeting orientation (i.e., how to classify expenditure), financial focus and cost estimation. (8 points) c. d. What are the problems associated with this type of budget? (5 points) What alternate budget-classification system would you recommend for the police department? Describe the measurable performance activities, programs, or outcomes. (5 points) FUND 100-GENERAL FUND Account Number 31 51.1101 51.1301 Overtime 51.1000 Sub-total: Salaries and Wages 51.2201 Social Security (FICA) Contributions Account Description or Title PERSONAL SERVICES/BENEFITS Regular Employees 51.2401 Retirement Contributions 51.2701 Workers Compensation 51.2901 Employment Physicals 51.2902 Employee Drug Screening Tests 51.2903 Flu/Hepatitis B Vaccine 51.2000 51.0000 52 52.2101 52.2201 52.2202 52.2203 52.2204 52.2205 52.2320 Sub-total: Employee Benefits TOTAL PERSONAL SERVICES PURCHASE/CONTRACT SERVICES Cleaning Services Rep. and Maint. (Equipment) Rep. and Maint. (Vehicles-Parts) Rep. and Maint. (Labor) Rep. and Maint. (Buildings/Grounds) Rep. and Maint. (Office Equipment) Rentals 52.2000 Sub-total: Property Services 52.3101 Insurance other than Benefit 52.3201 Telephone 52.3206 Postage 52.3301 53 53.1101 53.1102 Advertising 52.3401 Printing and Binding 52.3501 Travel 52.3801 Dues and Fees 52.360101 MDT Technology Fee Education and Training 52.3701 52.3000 52.0000 Sub-total: Other Purchased Services TOTAL PURCHASED SERVICES SUPPLIES Office Supplies Parts and Materials (K-0) 53.1103 Chemicals (K-9 Medical) 53.1104 Janitorial Supplies 53.1105 Uniforms and Turnout Gear 53.1106 General Supplies and Materials 53.110601 Ammunition and Taser Supplies 53.1107 53.1230 53.1270 Gasoline/Diesel 53.1301 Food CID Supplies Electricity 53.1401 Books and Periodicals 53.1601 Small Tools and Equipment 53.0000 TOTAL SUPPLIES DEPT-3200-POLICE $ $ $ $ $ $ $ $ $ $ $ $ ASSSSSS $ $ $ $ $ $ $ $ $ $ amm $ ssssss $ $ FY 2012 Actual 2,895,157 $ 134,387 $ 3,029,544 3 218,514 S 198,326 $ 115,250 $ 1,834 $ 1,524 $ 25 $ 535,473 S 3,565,017 $ $ 28,112 $ 93,492 $ 96,500 $ 458 $ 3,530 $ 5,225 $ 227,317 S 115,520 $ 7,745 $ 2,780 $ 4,330 $ 800 $ 26,340 $ 2,852 $ 25,863 $ 87,720 S 273,939 S 501,258 S 19,931 $ 400 $ 1,894 $ 11 $ 58,245 $ 9,739 $ 24,177 S 90,186 $ 228,307 $ 4,794 $ 561 $ 2,277 $ 440,591 $ FY 2013 Budget 2,903,129 $ 170,000 $ 3,073,129 S 233,564 $ 244,543 $ 82,982 $ 2,000 $ 1,500 $ 450 $ 565,029 $ 3,638,158 $ 4,500 $ 32,628 $ 75,000 $ 126,500 $ 15,200 $ 7,750 $ 8,400 $ 269,976 S 109,908 $ 10,000 $ 3,000 $ 4,000 $ 3,500 $ 30,000 $ 7,490 $ 30,000 $ S 197,898 S 487.874 S 19,500 $ 800 $ 3,800 $ 1,500 $ 65,000 $ 9,000 $ $ 26,100 $ 82,000 $ 234,900 $ 5,000 $ 2,000 $ 5,570 $ 455,250 $ FY 2014 Adopted 3,027,509 170,000 3,197,509 245,988 257,241 83,931 2,000 1,500 450 591,108 3,788,617 4,500 32,813 75,000 132,975 15,200 7,750 7,500 275,738 120,000 8,500 3,500 3,000 3,500 28,500 8,750 17,000 192,750 488,488 19,500 800 3,400 1,500 66,081 12,000 13,500 23,000 85,000 245,000 5,000 1,500 13,580 489,801 PUB510 Dr. Rui Sun FUND 100 - GENERAL FUND Account Number 54 54.1208 54.2301 54.0000 Account Description or Title CAPITAL OUTLAY (MINOR) Training Complex Furniture and Fixtures TOTAL CAPITAL OUTLAY (MINOR) $ INTERFUND/DEPT. CHARGES Self-funded Insurance (Medical) Llife and Disability 55 55.2401 55.2402 55.2403 Wellness Program 55.0000 TOTAL INTERFUND/INTERDEPT. DEPT-3200-POLICE FY 2012 Actual 57 OTHER COSTS 57.3401 Miscellaneous Expenses 57.3407 C.O.P 57.9000 Contingencies 57.0000 TOTAL OTHER COSTS TOTAL EXPENDITURES 555 5555 SSSS $ $ $ 785 $ 1,313 S 2,098 $ 795,488 $ 16,536 $ $ 812,024 S 3,324 S 1,555 $ FY 2013 Budget 1,500 $ 1,000 $ 2,500 $ 805,577 $ 17,237 $ 6,018 $ 828,832 $ 8,785 $ 9,000 $ 3,487 $ 5,715 $ 8,388 $ 23,500 $ 5,329,352 S 5,416,114 S FY 2014 Adopted 1,000 2,000 3,000 832,337 18,293 6,018 858,848 5,000 9,000 7,500 21,500 5,628,114 Dr. Rui Sun A. Short answers (35 points total): These questions require clear-cut answers with mostly descriptions and less elaboration. 1. (15 points) California's FY2012 budget includes the following chart that illustrates the shares of taxes paid by various income classes. In 2008, the top 15.6% of state taxpayers, those with adjusted gross incomes (AGI) over $100,000, paid 83.6% of the personal income tax. The top 1% of state taxpayers paid 43% of the personal income tax. What does this chart say, or not say, about the progressivity of the tax? Define revenue progressivity first, and then explain. 90.0% 80.0% 70.0% 60.0% 50.0% 40.0% 30.0% 20.0% 10.0% 0.0% Figure REV-03 Percent of Taxpayers and Percent of Tax Paid by Adjusted Gross Income Class 2008 State Tax Data Percent of Taxpayers □Tax Paid $0-20 $20:30 $30-40 $4050 $50-100 $100+ Adjusted Gross Income Class (Dollars in Thousands) Dr. Rui Sun 2. (10 points) How public goods, private goods, toll goods and common-pool goods differ from each other? Describe their characteristics and give at least two examples of each type of goods. 3. (10 points) Explain balanced budget requirements (BBR). What are other forms of legal constraints that affect state and local government finances? Describe them briefly. B. Long answers (65 points total): These questions focus on the application of class readings to real- world situations. Answers could vary. A successful answer requires more in-depth analyses and elaborations with theoretical discussions and practical examples or data. 1. (25 points) Several states have declared sales tax holidays, in which the state does not collect sales tax on certain items for a short period of time. In most instances, the holiday has been for clothing, and the period has been a week or ten days in August, the idea being to give a "back-to- school" discount as families get ready for the new school year. However, states have gotten more adventurous with the idea in recent years and have enacted or proposed holidays for hurricane survival supplies, gasoline, Energy Star appliances, and guns and ammunition. Analyze the idea of such holidays according to (1) yield, (2) equity, (3) administration and compliance, and (4) economic impact. 2. (20 points) Fighting wildfires is expensive. Global climate change seems to have worsened the conditions for wildfires in the American west. To help pay for the cost, in 2011, California started to impose an annual "fire prevention fee" from property owners in wild land areas where the state has responsibility for providing fire protection. a. What are the general methods that a state would use to finance state services (e.g., education, transportation, social services, and so forth)? For example, sales taxes, user charges, etc. Explain these financing methods. (5 points) b. Does financing this wildfire fighting through user charges make sense? Discuss this alternative as opposed to using general funds. What are the advantages and disadvantages of each approach? (10 points) c. Can you think of a better solution? Describe your solution. (5 points) 3. (20 points) The data in the following table present expenditures for a police department in a Southeastern city. a. Identify the budget-classification system (such as line-item, performance, or program budget, etc.) used in this budget document. (2 points) b. Compare and contrast this classification with at least two other alternative classification systems in terms of their organizational features, budgeting orientation (i.e., how to classify expenditure), financial focus and cost estimation. (8 points) c. d. What are the problems associated with this type of budget? (5 points) What alternate budget-classification system would you recommend for the police department? Describe the measurable performance activities, programs, or outcomes. (5 points) FUND 100-GENERAL FUND Account Number 31 51.1101 51.1301 Overtime 51.1000 Sub-total: Salaries and Wages 51.2201 Social Security (FICA) Contributions Account Description or Title PERSONAL SERVICES/BENEFITS Regular Employees 51.2401 Retirement Contributions 51.2701 Workers Compensation 51.2901 Employment Physicals 51.2902 Employee Drug Screening Tests 51.2903 Flu/Hepatitis B Vaccine 51.2000 51.0000 52 52.2101 52.2201 52.2202 52.2203 52.2204 52.2205 52.2320 Sub-total: Employee Benefits TOTAL PERSONAL SERVICES PURCHASE/CONTRACT SERVICES Cleaning Services Rep. and Maint. (Equipment) Rep. and Maint. (Vehicles-Parts) Rep. and Maint. (Labor) Rep. and Maint. (Buildings/Grounds) Rep. and Maint. (Office Equipment) Rentals 52.2000 Sub-total: Property Services 52.3101 Insurance other than Benefit 52.3201 Telephone 52.3206 Postage 52.3301 53 53.1101 53.1102 Advertising 52.3401 Printing and Binding 52.3501 Travel 52.3801 Dues and Fees 52.360101 MDT Technology Fee Education and Training 52.3701 52.3000 52.0000 Sub-total: Other Purchased Services TOTAL PURCHASED SERVICES SUPPLIES Office Supplies Parts and Materials (K-0) 53.1103 Chemicals (K-9 Medical) 53.1104 Janitorial Supplies 53.1105 Uniforms and Turnout Gear 53.1106 General Supplies and Materials 53.110601 Ammunition and Taser Supplies 53.1107 53.1230 53.1270 Gasoline/Diesel 53.1301 Food CID Supplies Electricity 53.1401 Books and Periodicals 53.1601 Small Tools and Equipment 53.0000 TOTAL SUPPLIES DEPT-3200-POLICE $ $ $ $ $ $ $ $ $ $ $ $ ASSSSSS $ $ $ $ $ $ $ $ $ $ amm $ ssssss $ $ FY 2012 Actual 2,895,157 $ 134,387 $ 3,029,544 3 218,514 S 198,326 $ 115,250 $ 1,834 $ 1,524 $ 25 $ 535,473 S 3,565,017 $ $ 28,112 $ 93,492 $ 96,500 $ 458 $ 3,530 $ 5,225 $ 227,317 S 115,520 $ 7,745 $ 2,780 $ 4,330 $ 800 $ 26,340 $ 2,852 $ 25,863 $ 87,720 S 273,939 S 501,258 S 19,931 $ 400 $ 1,894 $ 11 $ 58,245 $ 9,739 $ 24,177 S 90,186 $ 228,307 $ 4,794 $ 561 $ 2,277 $ 440,591 $ FY 2013 Budget 2,903,129 $ 170,000 $ 3,073,129 S 233,564 $ 244,543 $ 82,982 $ 2,000 $ 1,500 $ 450 $ 565,029 $ 3,638,158 $ 4,500 $ 32,628 $ 75,000 $ 126,500 $ 15,200 $ 7,750 $ 8,400 $ 269,976 S 109,908 $ 10,000 $ 3,000 $ 4,000 $ 3,500 $ 30,000 $ 7,490 $ 30,000 $ S 197,898 S 487.874 S 19,500 $ 800 $ 3,800 $ 1,500 $ 65,000 $ 9,000 $ $ 26,100 $ 82,000 $ 234,900 $ 5,000 $ 2,000 $ 5,570 $ 455,250 $ FY 2014 Adopted 3,027,509 170,000 3,197,509 245,988 257,241 83,931 2,000 1,500 450 591,108 3,788,617 4,500 32,813 75,000 132,975 15,200 7,750 7,500 275,738 120,000 8,500 3,500 3,000 3,500 28,500 8,750 17,000 192,750 488,488 19,500 800 3,400 1,500 66,081 12,000 13,500 23,000 85,000 245,000 5,000 1,500 13,580 489,801 PUB510 Dr. Rui Sun FUND 100 - GENERAL FUND Account Number 54 54.1208 54.2301 54.0000 Account Description or Title CAPITAL OUTLAY (MINOR) Training Complex Furniture and Fixtures TOTAL CAPITAL OUTLAY (MINOR) $ INTERFUND/DEPT. CHARGES Self-funded Insurance (Medical) Llife and Disability 55 55.2401 55.2402 55.2403 Wellness Program 55.0000 TOTAL INTERFUND/INTERDEPT. DEPT-3200-POLICE FY 2012 Actual 57 OTHER COSTS 57.3401 Miscellaneous Expenses 57.3407 C.O.P 57.9000 Contingencies 57.0000 TOTAL OTHER COSTS TOTAL EXPENDITURES 555 5555 SSSS $ $ $ 785 $ 1,313 S 2,098 $ 795,488 $ 16,536 $ $ 812,024 S 3,324 S 1,555 $ FY 2013 Budget 1,500 $ 1,000 $ 2,500 $ 805,577 $ 17,237 $ 6,018 $ 828,832 $ 8,785 $ 9,000 $ 3,487 $ 5,715 $ 8,388 $ 23,500 $ 5,329,352 S 5,416,114 S FY 2014 Adopted 1,000 2,000 3,000 832,337 18,293 6,018 858,848 5,000 9,000 7,500 21,500 5,628,114 Dr. Rui Sun
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A Short Answers Californias FY2012 Budget The chart indicates that the personal income tax in Califo... View the full answer
Related Book For
Management Accounting
ISBN: 978-0132570848
6th Canadian edition
Authors: Charles T. Horngren, Gary L. Sundem, William O. Stratton, Phillip Beaulieu
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