Deck 8: The State Budget and Budgetary Limitations

Question 1

The publicly funded agencies most affected by the restrictions of Proposition 13 are

A) fire departments.
B) police departments.
C) school districts.
D) prisons.

Answer 1

C

Question 2

What is the average sales tax in California?

A) 7 percent
B) 7.5 percent
C) 8 percent
D) 8.5 percent

Answer 2

D

Question 3

The California income tax is considered to be a

A) regressive tax.
B) progressive tax.
C) use tax.
D) property tax.

Answer 3

B

Question 4

Who are the Big 5?

A) the president, vice president, Speaker of the House, secretary of defense, and secretary of foreign affairs
B) the governor, Assembly speaker, Senate president pro tempore, the Assembly minority leader, and the Senate minority leader
C) the senators from the five largest constituencies in the state
D) the longest-serving justices on the California Supreme Court

Question 5

Which tax contributes the least revenue to the state of California?

A) personal income tax
B) sales tax
C) corporate tax
D) They contribute approximately equally.

Question 6

California gets most of its revenue from

A) sales tax.
B) personal income tax.
C) property tax.
D) insurance tax.

Question 7

One of the major problems with the sales tax is that it does not tax

A) capital gains on stocks.
B) revenue bonds.
C) services.
D) income obtained by religious organizations.

Question 8

The California Constitution requires that the governor and the legislature

A) pass a balanced budget.
B) engage in deficit financing.
C) reduce the rate of inflation.
D) ignore the Federal Reserve Bank.

Question 9

Students at the University of California (UC) pay more than ________ of their education cost.

A) one-fifth
B) one-third
C) half
D) three-quarters

Question 10

Raising taxes in California requires a ________ vote in both the Assembly and the Senate.

A) plurality
B) majority
C) two-thirds
D) unanimous

Question 11

Why have fees and tuition for higher education in California continued to rise?

A) Legislators believe that most California students come from wealthy families.
B) Data provided to the legislature made it look as if students had paid relatively low fees and tuition until recently.
C) The federal government slashed funding to California colleges.
D) There was a major funding shift in California to elementary and high schools.

Question 12

One factor that can have a major impact on state revenues in California is

A) the war in Afghanistan.
B) the financial knowledge of the state treasurer.
C) the state of the economy.
D) the line-item veto.

Question 13

Which proposition instituted a majority vote requirement to pass the budget?

A) Proposition 13
B) Proposition 198
C) Proposition 140
D) Proposition 25

Question 14

The legislature can override the governor's line-item veto by

A) a simple majority of both houses.
B) a two-thirds vote in both houses.
C) filing an appeal to the California Supreme Court.
D) a vote of no confidence in the governor.

Question 15

Property tax revenues go to the

A) state government.
B) State Board of Equalization.
C) local governments.
D) development of infrastructure.

Question 16

The legislative analyst's office provides

A) advice to the governor.
B) nonpartisan and independent reviews of the budget.
C) recommendations on bond issues.
D) advice to the legislature.

Question 17

The sales tax in California is considered to be a(n)

A) progressive tax.
B) regressive tax.
C) excise tax.
D) flat tax.

Question 18

If legislators miss the June 15 deadline mandated by Proposition 25 to pass a budget, they

A) have to start over.
B) have to obtain permission from the governor to continue past the due date.
C) must hold a special session of the legislature.
D) lose their salaries on every day the budget is late.

Question 19

After the passage of Proposition 13 in 1978

A) the state government has received less revenue.
B) state government revenue rapidly increased.
C) state government revenue has not been impacted.
D) real estate taxes rapidly increased.

Question 20

California's overall tax structure depends on tax revenues that are

A) paid by tourists.
B) imposed on foreign corporations and trusts.
C) levied on out of state manufacturing facilities.
D) rising and falling in line with the economy's performance.

Question 21

Outline the budget process in California. Who has the greatest amount of influence and power in this process?

Question 22

How well does the tax system in California work? What are the major problems?

Question 23

A critical challenge to California's tax structure is that it is

A) outmoded.
B) too complex for voters to understand.
C) focused solely on imposing taxes on services.
D) unfair to major corporations.

Question 24

What was the intent of Proposition 13? What impact did it have in California?

Question 25

Conservatives argue that California's income taxes are

A) moderate.
B) too high.
C) too low.
D) likely to be repealed.

Question 26

What category accounts for the largest expenditure in California's budget?

A) higher education
B) education (K-12)
C) corrections and rehabilitation
D) health and human services

Question 27

Local governments in California often try to attract ________ because of the considerable sales tax revenue they generate.

A) baseball teams
B) car dealerships
C) military installations
D) service providers

Question 28

What category of budget expenditure has seen increases over the last twenty years?

A) corrections and rehabilitation
B) health and human services
C) higher education
D) high-speed rail

Question 29

What is the difference between a regressive tax and a progressive tax? Cite examples of both.

Question 30

What major policy areas does the state of California spend its revenue on? How has each category fared in terms of spending in recent years?