Deck 10: People and Money in State and Local Governments

Question 1

Contracting of government services to private firms is referred to as ________.

A)outsourcing
B)bargaining
C)lobbying
D)gerrymandering
E)gentrification

Answer 1

A

Question 2

State and local governments enacted the ________ that enforced merit principles and restricted the political activities of their employees.

A)Taft-Hartley Act
B)little Hatch Acts
C)American Recovery and Reinvestment Act
D)Affordable Care Act
E)Morrill Acts

Answer 2

B

Question 3

Which of the following is true of labor unions and collective bargaining?

A)In "right to work" states, one's employment is dependent on whether one belongs to a labor union.
B)The private sector has a higher rate of union membership than does the public sector.
C)Collective bargaining refers to contracting of government services to private firms.
D)State and local government employees have greater collective bargaining rights.
E)The federal Taft-Hartley Act of 1947 does not allow labor unions to automatically collect dues from employees' paychecks.

Answer 3

B

Question 4

A ________ is where public employment hiring and promotion are based on demonstrated skill, training, and performance rather than on political patronage.

A)merit system
B)connector model
C)two-track system
D)de facto segregation
E)spoils system

Question 5

Some 24 American states are referred to as "right to work" states, meaning that one's employment cannot be dependent on whether ________.

A)one belongs to a particular minority group
B)one belongs to a labor union or not
C)one's performance is good or bad
D)one has a suitable skill set or not
E)one's total years of experience is adequate or not

Question 6

In the context of the merit system of staffing, according to a 1976 Supreme Court decision, states ________.

A)cannot dismiss civil servants for political reasons
B)cannot hire employees based on their performance
C)can hire and promote civil servants based on the spoils system
D)cannot promote employees based on their demonstrated skill set
E)can dismiss civil servants who belong to a particular political party

Question 7

Which of the following is true about property tax?

A)Economist Edwin Seligman called the property tax "the best tax known in the civilized world."
B)State and local governments do not tax income, property, and sales since all three of these are indicators of power.
C)The general property tax is a minor revenue source for local governments.
D)Calculating property tax is a single-step process where an assessment of the property is conducted.
E)Assessment is the valuation a government places on property for the purposes of taxation.

Question 8

The ________ is not easy to administer, and it sometimes bears little relationship to taxpayers' income or other measures of their ability to pay.It has been described as the "least fair" tax in U.S.public opinion surveys.

A)sales tax
B)property tax
C)individual income tax
D)severance tax
E)corporate income tax

Question 9

State and local governments get most of their money from ________.

A)congestion pricing
B)taxes
C)lobbying
D)outsourcing
E)privatization

Question 10

Identify the American state that first introduced a merit pay plan, in which employees' salaries were tied to managers' assessments of their performance.

A)South Carolina
B)Texas
C)Vermont
D)Georgia
E)Nebraska

Question 11

Identify the American state that gave managers great control over employee hiring and firing by adopting personnel system reforms.

A)South Carolina
B)Texas
C)Vermont
D)Florida
E)Nebraska

Question 12

A system of public employment based on rewarding party loyalists and friends is known as a ________.

A)merit system
B)connector model
C)two-track system
D)de facto segregation
E)spoils system

Question 13

In 1883, Congress passed the ________, which began to move the federal government from the spoils system to the merit system.

A)Taft-Hartley Act
B)Pendleton Civil Service Reform Act
C)American Recovery and Reinvestment Act
D)Affordable Care Act
E)Morrill Act

Question 14

Which of the following is an advantage of outsourcing?

A)Private organizations can bring a lot of expertise to public projects.
B)It makes governments responsible for maintaining a workforce between projects.
C)It allows elected officials to trust their states' own public bureaucracies.
D)It allows governments to avoid paying for the completion of a specific project.
E)It allows governments to maintain a workforce whose skills are appropriate for later projects.

Question 15

State and local governments tax income, property, and sales since all three of these are indicators of what government would really like to tax-________.

A)status
B)growth
C)wealth
D)education
E)power

Question 16

The factor that distinguishes merit system from spoils system is that ________.

A)it is generally used to hire only male employees
B)it is used to select employees for subordinate positions
C)hiring is based on demonstrated skill, training, and performance
D)hiring is based on rewarding party loyalists and friends
E)employees hired through merit system usually show poor performance

Question 17

________ refers to the negotiations between an employer and a labor union to set wages, benefits, and working conditions.

A)Lobbying
B)Contracting
C)Reapportionment
D)Collective bargaining
E)Gerrymandering

Question 18

Twenty-six American states allow labor unions to engage in collecting dues automatically from employees' paychecks, as allowed by the federal ________ Act of 1947.

A)Taft-Hartley
B)Pendleton Civil Service Reform
C)American Recovery and Reinvestment
D)little Hatch
E)Morrill

Question 19

In the 1990s, Georgia introduced a merit pay plan, in which ________.

A)employees' performance did not influence their pay structure
B)managers' salary was purely based on their subordinates' performance
C)employees' salaries were based on their qualification and gender
D)managers decided their subordinates' salaries based on their political favoritism
E)all newly hired or promoted persons served "at will," that is, at the discretion of the managers.

Question 20

Governor Rick Snyder signed a legislation doing away with the automatic collection of union dues for all workers into law, making ________ the twenty-fourth right-to-work state in the U.S.

A)Indiana
B)Ohio
C)Wisconsin
D)Nebraska
E)Michigan

Question 21

The ________ tax is a major revenue source for local governments, even though it is considered the "least fair" or the "worst" tax in U.S.public opinion surveys.

A)general property
B)individual income
C)corporate income
D)sales
E)severance

Question 22

Identify the American state that collects individual income taxes.

A)South Dakota
B)Florida
C)Wyoming
D)Washington
E)Oregon

Question 23

A tax on the increased worth of a product at each stage of production and distribution rather than just at the point of sale is known as a ________ tax.

A)value-added
B)severance
C)payroll
D)property
E)sales

Question 24

Which of the following statements is true about American state lottery revenues?

A)In recent decades, state lotteries have decreased in popularity because they raise taxes.
B)Church groups are very vocal in their support of state lotteries.
C)Lottery revenues are spread evenly across all the states.
D)All states earmark all of their proceeds from lotteries for education.
E)A significant number of states commit their proceeds from lotteries to the state general fund.

Question 25

Which of the following American states does not permit some form of legalized gambling?

A)California
B)Utah
C)Florida
D)Louisiana
E)Mississippi

Question 26

________ taxes are unpopular with local merchants, who fear they drive business away.

A)Sales
B)Income
C)Property
D)Severance
E)Securities

Question 27

Property tax is a stable, predictable source of funding, especially important for ________.

A)local governments
B)interest groups
C)federal government
D)constituents
E)state governments

Question 28

State individual income taxes are usually based on ________ taxable income that refers to income from all sources minus personal exemptions and itemized deductions, if any.

A)state
B)individual
C)federal
D)corporate
E)local

Question 29

Which of the following statements is true of legalized gambling?

A)There has been a dramatic decrease in legalized gambling in the United States.
B)All states permit legalized casino gambling.
C)State revenues from non-lottery gambling decrease every year since 1998.
D)The spread of casinos was in part a consequence of Native American tribes asserting their right to self-rule on reservations.
E)Legalized gambling is one of the largest revenue sources for local government.

Question 30

________ refers to a general tax on commercial transactions, sometimes exempting food and medicine.

A)Individual income tax
B)Property tax
C)Sales tax
D)Severance tax
E)Corporate income tax

Question 31

During the collection of property taxes, which of the following steps is taken after the local governing body sets the millage?

A)gerrymandering
B)severance
C)assessment
D)malapportionment
E)referendum

Question 32

Which of the following statements is true of individual income taxes?

A)State individual income taxes rise as sharply as the federal income tax.
B)Most states allow local governments to levy income taxes.
C)It is one of the two largest revenue sources for state government.
D)Individual income tax is an important source of revenue for local government.
E)All states collect individual income taxes without any exception.

Question 33

A tax graduated so that people of higher incomes pay a larger fraction of their income than people of lower incomes is known as a ________ tax.

A)selective
B)general
C)property
D)severance
E)progressive

Question 34

Sales taxes on fuel, alcohol, and tobacco products are also known as ________ taxes.

A)severance
B)turnover
C)excise
D)flat sales
E)general sales

Question 35

The type of state sales tax levied on specific items like motor vehicle fuel, alcohol, and tobacco products is referred to as a(n) ________ sales tax.

A)securities turnover
B)general
C)selective
D)active
E)passive

Question 36

The type of state sales tax levied on most retail goods is referred to as a(n) ________ sales tax.

A)specific
B)general
C)selective
D)active
E)excise

Question 37

Identify the American state that taxes an individual's dividend and interest income but not his or her wages.

A)South Dakota
B)Florida
C)Wyoming
D)Washington
E)Tennessee

Question 38

________ refers to a reduction in the property tax one owes if the calculated tax grows to be larger than a given percentage of one's income.

A)The two-track system
B)The circuit breaker exemption
C)Malapportionment
D)Gerrymandering
E)Collective bargaining

Question 39

Which of the following is true of sales tax?

A)The sales tax is the most important source of local revenue.
B)State sales tax on most retail goods is referred to as excise tax.
C)The general sales tax is set at a much higher rate than the specific sales tax.
D)State sales tax on specific items is referred to as general sales tax.
E)Every state, even those without a general sales tax, imposes selective sales taxes on some items.

Question 40

A tax on the privilege of removing such natural resources as coal, oil, timber, and gas from the land is known as ________ tax.

A)selective
B)general
C)property
D)severance
E)progressive

Question 41

________ expenditures of state and local governments encompass parks and recreation facilities, waste management, and natural resource management.

A)Public safety
B)Environment
C)Transportation
D)Administration
E)Social service

Question 42

Fiscal capacities can be defined as ________.

A)limits placed on state spending by the U.S.Congress
B)the potential borrowing power of a state or municipality
C)the revenues a state brings in within a fiscal year
D)the economic resources a state may tax
E)the expenditures of states on cashing assistance

Question 43

More than half of the total money collected by state and local governments through taxes, federal grants, and other sources is spent on the functions of ________.

A)cash assistance and administration
B)health and education
C)transportation and public safety
D)social services and libraries
E)higher education and tuition

Question 44

The Continental Congress financed the Revolutionary War by ________.

A)issuing a tax on farm goods
B)running a lottery
C)non-lottery gambling
D)borrowing money from the French
E)receiving grants from the federal government

Question 45

Which of the following is true of state revenue and management systems?

A)In the new economy, services, intangible property, and business activities without clear geographic locations are increasingly uncommon.
B)They are better at collecting taxes on services rather than on goods.
C)They are better at collecting taxes on businesses whose operations occur in specific locations.
D)They are better at collecting taxes on intangible property rather than tangible property
E)States do not differ greatly in their fiscal capacities.

Question 46

Expenditures of state and local governments which included police, fire protection, and corrections come under the category of ________ expenditures.

A)public safety
B)environment
C)transportation
D)administration
E)social service

Question 47

Most of the state and local government spending on health is disbursed through the Medicaid program, a joint federal-state program that provides medical assistance to ________.

A)needy children
B)elderly citizens
C)low-income families
D)disabled individuals
E)minority groups

Question 48

Which of the following is true of the challenges faced by state revenue and management systems?

A)State and local governments do not vary greatly in their administrative capabilities.
B)The federal government may attempt to reduce differences by giving larger federal grants-in-aid to low-fiscal capacity states.
C)State spending on functions such as health care and social services is not affected by differences in their fiscal capacity.
D)Higher incomes are associated with lower consumption and property values.
E)State revenue systems are better at collecting taxes on services than on goods.

Question 49

Building schools, constructing roads, and clearing slums are examples of ________.

A)capital expenditures
B)malapportionment
C)reinvestments
D)capital gains
E)severances

Question 50

Which of the following is true of the challenges faced by state revenue and management systems?

A)States differ substantially in what they can do for their residents, and this is seen to create inequities.
B)State revenue systems are better at collecting taxes on services than on goods.
C)State revenue systems are better at collecting taxes on intangible property rather than tangible property.
D)State revenue systems are better at collecting taxes on businesses whose operations are partly virtual and global than on those whose businesses occur in specific locations.
E)States do not vary greatly in their fiscal capacities.

Question 51

Which of the following statements is true of borrowing money?

A)Bonds are financial instruments issued by federal governments and bought by state governments.
B)The power to borrow money for the long term does not require any voter approval.
C)In most cases, revenue bonds require voter approval.
D)State and local bonds are attractive to investors because the interest they earn is exempt from federal income tax.
E)Private businesses can borrow money at a lower interest rate than state and local governments can.

Question 52

________ expenditures of state and local governments consist of expenditures on roads and highways.

A)Public safety
B)Environment
C)Transportation
D)Administration
E)Social service

Question 53

________ is a health care program in which the federal government provides at least $1 (and sometimes up to $3) for every dollar the state spends .

A)Military Health System
B)Medicaid
C)Medicare
D)Veterans Health Administration
E)Prescription Assistance

Question 54

________ between governments, usually from higher levels of government to lower levels, are essential and influential sources of revenue for state and local governments.

A)Grants
B)Sales
C)Taxes
D)Lotteries
E)Bonds

Question 55

Which of the following is true of state revenue and management systems?

A)Medicaid provides equal financial support to all states, irrespective of their economic status.
B)Although states vary in their natural resources, it does not affect their ability to obtain severance taxes.
C)States do not vary greatly in their fiscal capabilities.
D)State and local governments vary greatly in their administrative capabilities.
E)State revenue systems are better at collecting taxes on services than on goods.

Question 56

________ are financial instruments issued by state and local governments and bought by investors.

A)Grants
B)Sales
C)Taxes
D)Lotteries
E)Bonds

Question 57

State and local governments spend the least amount of money on ________.

A)cash assistance payments
B)environment and housing
C)public safety
D)administration
E)higher education

Question 58

Which of the following economic activities is difficult to tax due to the emergence of services, intangible property, and business activities without clear geographic locations?

A)Internet sales
B)outsourcing
C)corporate income
D)assessment
E)collective bargaining

Question 59

Which of the following statements is true about the expenditures of state and local governments?

A)State and local governments spend most of their money on cash assistance and administration.
B)State and local governments are not able to collect much money through taxes, federal grants, and other sources.
C)State and local governments spend very little on health and education.
D)Public safety expenditures exclude police, fire protection, and corrections.
E)Most of the spending on health is disbursed through the Medicaid program.

Question 60

Which of the following statements about grants is true?

A)Grants between governments are usually from lower levels of government to higher levels.
B)Grants are not very significant sources of revenue for state and local governments.
C)Most of the growth in federal grants as sources of revenues for state governments has come from Medicaid.
D)Local governments do not usually rely on grants from states.
E)Local governments do not receive federal grants for education and transportation.

Question 61

Often the general sales tax is set at a much higher rate than the specific sales tax.

Question 62

There has been a dramatic decrease in legalized gambling in the United States.

Question 63

The multi-step process of calculating property taxes has led to some gamesmanship on the part of local governments.

Question 64

Property tax is an unstable and unpredictable source of funding for state governments.

Question 65

One way for contractors to be more efficient than the government in delivering services is to pay their employees higher salaries and increased benefits in comparison to public sector employees.

Question 66

Many states have cut corporate income tax rates or granted generous exemptions as a way to try to attract businesses to their state.

Question 67

Grants between governments pass from lower levels of government to higher levels.

Question 68

State and local bonds are attractive to investors because the interest they earn is exempt from federal income tax.

Question 69

The Medicaid program is a joint federal-state program that provides medical assistance to low-income families.

Question 70

More than one-third of the cost of state and local government is employees' salaries.

Question 71

Private businesses can borrow money at a lower interest rate than state and local governments can.

Question 72

Most of the growth in federal grants as sources of revenues for state governments has come from TRICARE.

Question 73

In recent decades, state lotteries have decreased in popularity, in part because they increase revenues by raising taxes.

Question 74

Dealing with public sector labor unions is a major focus of state and local government in many states.

Question 75

State constitutions cannot restrict state legislatures' taxing powers.

Question 76

The property tax is easy to administer, and it bears no relationship to taxpayers' income or other measures of their ability to pay.

Question 77

Sales taxes are unpopular with local merchants, who fear they drive business away.

Question 78

State and local governments spend most of the money on social services and transportation.

Question 79

Bonds are financial instruments issued by state and local governments and bought by investors.

Question 80

State and local governments in America get most of their money from taxes.