Deck 8: The State Budget and Budgetary Limitations

Question 1

Which of the following is NOT part of the budget forming process in California?

A) proposal by the executive branch
B) enactment by the legislature
C) approval by the California Supreme Court
D) implementation by the executive branch

Answer 1

C

Question 2

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

Answer 2

C

Question 3

Since 1990, how many times has the California legislature passed a budget on time?

A) 2
B) 4
C) 5
D) 8

Answer 3

D

Question 4

What is the average sales tax in California?

A) 7.25 percent
B) 7.50 percent
C) 7.75 percent
D) 8.25 percent

Question 5

Raising taxes in California requires

A) a majority vote in both the Assembly and the Senate.
B) a two-thirds vote in both the Assembly and the Senate.
C) a constitutional initiative.
D) the approval of the citizens tax committee.

Question 6

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 7

Which tax in California is considered to be regressive?

A) the personal income tax
B) property tax
C) sales tax
D) corporate tax

Question 8

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

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

Question 9

The California income tax is considered to be a

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

Question 10

California's fiscal year runs from

A) October 1 to September 30.
B) July 1 to June 30.
C) January 1 to December 31.
D) April 1 to March 31.

Question 11

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

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

Question 12

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 13

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 14

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 15

California's bond rating has been increased to A from just above junk status mainly because

A) the state's income no longer fluctuates.
B) the state's revenues have increased in recent times.
C) the governor no longer uses the line-item veto.
D) the state's population desires to pay higher taxes.

Question 16

When the state of California wants to borrow money it can issue

A) IOUs.
B) tax receipts.
C) bonds.
D) script.

Question 17

Which of the following does NOT explain why state revenues vary so much?

A) the economy
B) the state budget relies exclusively on property taxes
C) the personal income tax relies more on capital gains than on taxes on wage earners
D) the state budget is limited by initiatives that are too restrictive

Question 18

California gets most of its revenue from

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

Question 19

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

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

Question 20

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 21

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 22

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

Question 23

Liberals argue that California's taxes are

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

Question 24

Why does income from taxes vary in California? Which taxes are likely to vary the most?

Question 25

Cite some examples of how various propositions have limited the ability of the state government
in California to allocate and spend tax revenues.

Question 26

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

Question 27

What arguments do liberals and conservatives make about taxes in California?

Question 28

Fees for students attending the California State University and community colleges have

A) remained the same.
B) dropped substantially.
C) been reduced by federal subsidies.
D) increased substantially.

Question 29

What did Proposition 5 mandate?

A) The state was allowed to cut property taxes to the assessed valuation of the property in 1975.
B) The state requires the vote of the electorate on all taxes that might be used to replace revenues lost under Proposition 13.
C) The state was mandated to negotiate a compact to allow tribal casinos.
D) The state was authorized to sell $3 billion in bonds to fund stem-cell research.

Question 30

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