2. LESS FEDERAL INVOLVEMENT Education Drugs Welfare Crime

3. 1.GOVERNOR 2.LEGISLATURE 3.GOVERNOR

4. Budget must be balanced State spending cannot exceed state revenues

5. RAINY DAY FUND: When revenues are high keep money aside

6. Federal = income tax State = various taxes, fees, federal grants, loans, and lotteries

8. High tax rate discourages businesses from locating in our state

9. Tax on the sale of a good or service

10. Hotel Sales Tax = people are out-of-state Residents OKAY May discourage vacations and conventions

11. Liquor and cigarettes

12. Levied on individuals and businesses Flat Rate – all people pay same

13. Progressive Rate – depends on how much money you make

14. Tax resources that are removed from the ground

15. Tax on people who use a state service

16. Funds schools, bridges, roads, etc. Helps in keeping state taxes lower

17. BONDS: state is in debt to bondholder for that amount Bondholder receives interest