1. Revenue Scarcity
-Revenue is limited, so government must make choices about spending
-setting priorities
-Political Party goals

2. Budgets
-Budgets are a plan for spending the government’s money
-Revenue or receipts-- Economic term for the money that is received
-Expenditures-- Economic term for the money that is spent
-Most budgets are one year budgets
-fiscal year

3. Drafting a Budget
-drafting a budget is a long process
-executive branch prepares most of the budget
-expenditures are often based upon the President, Governor, or local leader’s goals

4. Drafting a Budget
-drafting a budget is a long process
-executive branch prepares most of the budget
-expenditures are often based upon the President, Governor, or local leader’s goals

5. Approving a Budget
-Budgets must be passed by the legislative branch
-serves as a check on the government’s spending power
-Goals of Congressmen may conflict with budget proposals
-Final version is often a series of compromises

6. State & Local Budgets
-Similar budget process as Federal Government
-May be of a much smaller scale
-May be more important to citizens of the community than federal budget

7. Expenditures
-Expenses change each year
-Most larges expenses change very little
Social Security, National Defense, Medicare, and Interest on National Debt
-Local and State Governments
Education, Social Services, Transportation, and Public Safety

8. Budget Deficits
-Limited Revenues, but unlimited places to spend money
-Some spending is actually borrowed money to pay for expenses
Bonds
-Effects of National Debt

9. Balancing Budgets
-Balanced Budget-- Idea that a budget should never spend more money than it has received
-Federal Government has a history of high budget deficits since the 1980’s leading to a high national debt
-Most states and local government are required to balance their budgets

10. Revenue Sharing
-Governments sometimes help one another with funding problems
-Intergovernmental Revenue
-Governments can receive grants to help solve problems
-Federal Grant-In-Aid
-Federally mandated programs and funding is a problem for many local and state gov’ts