The State Budget: NC’s Revenues, Taxes, and Expenditures

Warm Up-◦What is revenue?

◦What are expenditures?

◦At the federal level who creates the budget?

I. RevenueA. Federal Grants -federal money goes to state and

local government (usually for specific projects.B. Intergovernmental Revenue - money from one

level of gov’t to another (federal-state, state-county or city)

C. Municipal Bonds –loans issued by state and local gov’ts to build highways, libraries, parks, school, etc.

◦ Bonds are promissory notes from banks that dictate the taxpayers are responsible for paying back the debt

1. may raise taxes to pay back2. voters vote on bonds

D. Other sources of revenues:1. Fines- Traffic tickets2. Fees-Licenses, license tags3. Permits- hunting, fishing4. Tolls-driving on highways, ferries, bridges5. Lotteries-gambling used for education

NC Revenue

What percentage of NC’s revenue comes from direct taxes?

Sales tax

Income Tax

Corporate Incone Tax

Fees, Fines, Tolls

Lottery, Excise

E. Taxes: Biggest source of revenue.1. State Income Tax: income of individuals and

corporations.-Progressive-more income, higher percentage.

2. Sales Tax:-sale of goods& services1. easy to collect, dependable2. Regressive-people pay same amount, puts more

burden on low-socioeconomic status citizens.3. Excise Taxes: tax on specific good or service

(ex: cigarette tax)4. Property Tax- biggest source of local

money5. Estate Tax- tax on estate of someone who

died.

II. ExpendituresA. Education –most expensive expenditure

1. local taxes, esp. property taxes provide funding 2. states set curricula, pay for teachers.

B. Public Safety –law enforcement and corrections system.

C. Highways and Roads, bridgesD. Other- Gov’t buildings, hospitals, libraries, parks.E. Welfare for low income citizens, health care for

poor children ( insurance for low income children), Medicaid, and food stamps.

NC General Fund Operating Budget

How much of NC’s Budget goes to edu-cation?

Schools

Health &HS

Univ Syst.

Justice/Safety

Comm Coll.

Gov't/Nat. Resouces

Debt

III. NC’s fiscal year is from July 1 – June 30Our budget:

◦two-year (biennial) budget.◦Must balance (no deficit)◦(1)Begins with Governor’s proposal (2)debated & passed by the General Assembly

(3) signed into law or vetoed by governor