State Government Policy

1. Regulation of Businesses What is an example of a government regulation that applies to a business? Why do we depend on the government to regulate businesses?

State Regulation of Businesses The state regulates monetary policy Limits interest rates that banks can charge Limits insurance rates (car, renter, home owner) Regulates public utilities (necessities) If a company wants to provide a service in a state, they must abide by the state’s regulations Consumer protection Issues professional licenses and exams Doctors, lawyers, teachers, drivers

2. Consumer Protection Whose job is it? The state regulates all kinds of things: – Interest charges on credit cards – Auto repair estimates – Landlord-tenant relations – Home repair costs Why does the state bother?

3. Worker Protection Worker’s compensation – Payments to people who are unable to work due to a work-related injury Unemployment – Workers who lose jobs unexpectedly

What is problematic in this picture? Hint: look at the sky

4. Environmental Regulation Why does the state bother to regulate the environment? BBC News Nov. 23, 2010: Tehran schools closed due to smog. Tehran is believed to be one of most polluted cities in the world. “All schools and nurseries in the Iranian capital, Tehran, have been closed for two days because air pollution has reached dangerous levels.”

How does the state government regulate pollution? Develop waste management systems Large corporations submit reports on the likely effect of their industry on the environment Companies must obtain permits for air or water pollution or install anti- pollution devices Pollution standards are set to reduce greenhouse gas emissions

How does the government care for the environment? Regulation of land use and natural resources Lakes, rivers, streams Land, forests, parks Oil, natural gas, energy sources Wildlife protection and hunting regulation

5. State Justice System The state has a criminal code that gives local authorities powers to make some laws but not others The state has a criminal code that gives local authorities powers to make some laws but not others States set their own system of punishments States set their own system of punishments – Ex: Mandatory sentencing in drug-related crimes or victim compensation Correctional System: state prisons, county and municipal jails, detention centers Correctional System: state prisons, county and municipal jails, detention centers – State spending on corrections has increased more each year than highway, education, hospital or public welfare systems

6. Education and the State The state contributes some money to public schools and local governments distribute the rest The state mandates standardized testing (CSAP), number of years students must attend school, graduation requirements, minimum teacher salaries, etc.

7. The State and Low-Income Residents Medicaid- medical support for low-income elderly people, low- income families, and the visually and physically impaired Funded by both national and state governments Welfare programs attempt to provide a temporary remedy Unemploy- ment Food stamps

8. Taxes Tax goods that go in and out of the state or country (imports and exports) Tax federal property Use taxing power to deprive people of “equal protection of the law” or life, liberty or property without “due process” According to the US Constitution, state and local government CANNOT:

Sales Tax General: household items, cars, clothing, etc. Selective/excise: cigarettes, liquor, gas, etc. Income Tax Progressive tax: percentage rises as income rises Proportional tax: taxes are same rate regardless of income (ex: fixed 10%)

Other Sources of Revenue Motor vehicle registration Motor vehicle registration Lotteries Lotteries Traffic tickets Traffic tickets and parking fees Federal money makes up 20% of state revenue Federal money makes up 20% of state revenue – Grants for a specific purpose Borrowing for long- term construction or building projects Borrowing for long- term construction or building projects – Selling bonds – Often voters have to approve new bond issues

Assignment Page 674 Compare the pie graphs and discuss the major differences at your table between state and local expenditures. Compare the pie graphs and discuss the major differences at your table between state and local expenditures. What do you think accounts for these differences? What do you think accounts for these differences? Page 676 Read about eminent domain and answer questions 1-3 about the case. Read about eminent domain and answer questions 1-3 about the case. As a group, discuss the “You Be the Judge” topics As a group, discuss the “You Be the Judge” topics