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

2. Warm Up- ◦What is revenue? ◦What are expenditures? ◦At the federal level who creates the budget?

3. I. Revenue A. 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

4. 1. may raise taxes to pay back 2. voters vote on bonds D. Other sources of revenues: 1.Fines- Traffic tickets 2.Fees-Licenses, license tags 3.Permits- hunting, fishing 4.Tolls-driving on highways, ferries, bridges 5.Lotteries-gambling used for education

5. NC Revenue

6. 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& services 1.easy to collect, dependable 2.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 money 5.Estate Tax- tax on estate of someone who died.

7. II. Expenditures A.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, bridges D.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.

8. NC General Fund Operating Budget

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