"It is difficult to properly handle investments in public budgets. The rewards are spread out over an extended period of time while the cost or the pain of investing is immediate. That makes if difficult to finance public investments" (Penner, 2008).
For the state and local governments to be able to fund their investments, they should organize their incomes into two categories: current operating capital and capital component. A simple accounting method would help them benefit immediately from the investment. In this order of ideas, given that the investment is amortized and the amortization is registered as part of operating expenses, the users of the investments would immediately benefit from it, and also pay it at the same time (Penner, 2008).
Another means to deal with the upcoming investments or the financial coverage of other needs likely to emerge should revolve around the constitution of rainy days funds. These would allow each state institution to govern itself in an efficient manner and are even more so worthy as they have saved several state institutions throughout the 2001 economic recession (Ruben, McGuire and Kellam, 2007). They are also referred to as budget stabilization and are constituted from funds which "allow states to set aside excess revenue for use in times of unexpected revenue shortfall of budget deficit" (Rueben and Rosenberg, 2008). The amount of rainy day funds each institution allocates depends on various features. In 2007 for instance, rainy day funds accounted for 1% of all institutional funds in Michigan and Wisconsin, 20% in North Dakota and 50% in Alaska. The other states found their rainy day funds somewhere between the extremes of 1% and 50% of total funds.
Unconditioned aid systems should not be implemented in order to stimulate state and local institutions to govern themselves with the taxes collected throughout a fiscal year. If the government constantly steps in and resolves the financial shortages of a state organization, that respective institution will never learn how to properly administrate their funds, assets and debts.
Then, there is the matter of paying back. However it cannot be generalized that state institutions do not timely and efficiently pay their debts, there were several situations when this occurred. Otherwise put,...
fiscal federalism on finance and budgeting in public organizations. Federalism is a political concept in which groups are bound together by a representative governing body. This is usually constitutionally divided between a central authority and political units; in the United States, the Federal Government and the 50 State Governments. The issue of federalism was actual controversial during America's revolutionary period when some feared that too much power at the Federal
Fiscal Federalism To the Cato Institute: The Cato Institute policy statement on "Fiscal Federalism" is an excellent example of 'throwing the baby out with the bath water.' Yes, there may be unnecessary government bureaucracy involved in the awarding of federal grants to states. But the need for more efficiency does not mean that the entire program should be scrapped. During the recent 2008 recession, many states were cash-strapped and desperately needed funds
Fiscal FederalismINTRODUCTIONFiscal federalism is the relationship between different levels of government in a federation with respect to their spending and revenue-raising powers. The three key dimensions of fiscal federalism are vertical fiscal imbalances, horizontal fiscal equalization, and spending assignment.The first use of the term �fiscal federalism� was by German-born�American economist Richard Musgrave in 1959 (Kapucu, 2022). It was used to describe the relationship between the central government and the states.
This could pose additional threats (Brimacombe, Antunes and McIntyre, 2001). There are also two arguments which reveal the overstatement of the estimations. The first refers to the fact that the tax structures are taken as constants, when in fact modifications could occur and result in the allocation of more funds to the health care sector. Then, the second argument is that the business, technology and administrative communities present the population
Daniels When City and Country Collide Thomas L. Daniel's When City and Country Collide provides an interesting and largely effective analysis of the spread of urban sprawl in America. This paper outlines the key themes and findings within Daniel's book, and discusses the relationship between Daniel's book and Managing Urban America, by David R. Morgan and Robert E. England. Overall, When City and Country Collide provides a useful look into how
According to Kelly and Ransom (2000), by state law, Trenton, like other cities in New Jersey, is not allowed to increase its annual budget by more than 3.5% per year absent a referendum that approves such larger increases. For the state capital, Kelly and Ransom note that, "Property taxes are not a viable source of revenue, as much of the city of Trenton is owned by the state of
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