Question 1

The single most important source of revenue for state government in Texas is the property tax.

Accepted Answer

A) True 
 B)False  False

Question 2

Which of the following agencies is responsible for managing the Permanent School Fund?

Accepted Answer

A)   the Texas legislature
B)   the Texas Board of Education
C)   the Texas comptroller
D)   the Higher Education Coordinating Board
E)   the Texas land commissioner B

Question 3

Explain the impact of the Great Recession on the budget of Texas.

Accepted Answer

The Great Recession had a significant impact on the budget of Texas. The state experienced a decline in tax revenues as a result of the economic downturn, leading to budget cuts and financial strain. This resulted in reduced funding for essential services such as education, healthcare, and infrastructure. Texas also had to tap into its rainy day fund to mitigate the impact of the recession on its budget. Additionally, the state had to make tough decisions regarding spending priorities and address the challenges of a shrinking economy and rising unemployment. Overall, the Great Recession had a substantial and lasting impact on the budget of Texas, requiring careful financial management and strategic planning to navigate through the difficult economic conditions.

Question 4

Texas is known as a high tax state; because of this, it is a good place to do business.

Accepted Answer

A) True 
 B)False

Question 5

What is the argument commonly used by supporters of a state income tax?

Accepted Answer

A)   It will probably be quite regressive.
B)   It is a fairer but a highly unreliable source of revenue.
C)   It makes Texas more attractive to businesses that are considering relocating from out of state.
D)   It is not influenced by special interests.
E)   It is a fairer and more reliable source of revenue.

Question 6

Federal funds appropriated in Texas generally are

Accepted Answer

A)   widely disbursed across numerous state agencies.
B)   concentrated in one agency.
C)   concentrated on a few state agencies.
D)   determined at each annual legislative session.
E)   earmarked almost exclusively to education.

Question 7

The funds generated by the Permanent School Fund are distributed to school districts across the state

Accepted Answer

A)   based solely on financial need.
B)   based on attendance rates.
C)   as mandated by the Texas Constitution of 1876.
D)   at the discretion of the governor.
E)   based on the tax rate for school districts.

Question 8

The Rainy Day Fund is more properly known as the National Research University Fund.

Accepted Answer

A) True 
 B)False

Question 9

The Legislative Budget Board (LBB) plays an important role in the budget process in Texas.

Accepted Answer

A) True 
 B)False

Question 10

Under Texas's budgetary system, there is no power to shift monies between agencies or programs when the legislature in not in session.

Accepted Answer

A) True 
 B)False

Question 11

Taking into account increasing Medicaid and school district funding, the general revenue shortfall for the 2012-2013 biennium budget was

Accepted Answer

A)   between $24 and $27 million.
B)   between $24 and $27 billion.
C)   about $87 million.
D)   well over $100 billion.
E)   nearly $1 trillion.

Question 12

If Texas instituted a progressive income tax

Accepted Answer

A)   low-income Texans would pay a lower tax rate than wealthy Texans.
B)   low-income Texans, collectively, would contribute less to the state budget than wealthy Texans would.
C)   wealthy Texans would pay at a lower tax rate.
D)   people with lower incomes would pay a higher tax rate.
E)   poor homeowners and renters would pay taxes at higher rates.

Question 13

Which statement regarding state-federal spending in Texas is true?

Accepted Answer

A)   Texas spends more on state-federal programs than most states do.
B)   Texas spends less on state-federal programs than most states do.
C)   Texas spends more than any state for state-federal programs because Texans favor massive public welfare programs.
D)   State-federal spending in Texas has been historically high relative to that of the rest of the states.
E)   Federal efforts to balance the budget have virtually eliminated all state-federal spending in Texas.

Question 14

The LBB's draft budget, not the governor's budget, is the one voted upon by the legislature.

Accepted Answer

A) True 
 B)False

Question 15

Appropriations bills work their ways through both the House and the senate simultaneously. When there is disagreement on two versions of a bill, the bill is reconciled by

Accepted Answer

A)   a state judge.
B)   the governor.
C)   a select committee.
D)   a conference committee.
E)   a vote of the House and senate.

Question 16

The main purpose of the Permanent School Fund (PSF) is to

Accepted Answer

A)   buy textbooks for Texas children.
B)   fund primary and secondary schools in the state.
C)   fund universities and community colleges in the state.
D)   fund the two main universities in Texas: the University of Texas and Texas A & M.
E)   fund religious education in Texas.

Question 17

What action forced the legislature to bring the 2012-2013 state budget into balance?

Accepted Answer

A)   The Texas Supreme Court ordered a balanced budget.
B)   The LBB passed the balanced budget, but it was vetoed by the governor.
C)   A special session of the Texas legislature voted for a balanced budget.
D)   The comptroller filed a lawsuit against the governor and the legislature.
E)   The federal government loaned Texas enough money to balance the Texas budget.

Question 18

Texas spending on a per capita basis is

Accepted Answer

A)   about even with the national average.
B)   much higher than the national average.
C)   much lower than the national average.
D)   among the highest, particularly in education.
E)   second only to that of New York State.

Question 19

Who prepares the BRE?

Accepted Answer

A)   the Legislative Budget Board
B)   the comptroller
C)   the secretary of state for Texas
D)   the legislative committee on tax fairness
E)   the lieutenant governor

Question 20

Texas maintains a balanced budget because the state Constitution requires it.

Accepted Answer

A) True 
 B)False

Exam 11: Public Finance in Texas

The single most important source of revenue for state government in Texas is the property tax.

Which of the following agencies is responsible for managing the Permanent School Fund?

Explain the impact of the Great Recession on the budget of Texas.

Texas is known as a high tax state; because of this, it is a good place to do business.

What is the argument commonly used by supporters of a state income tax?

Federal funds appropriated in Texas generally are

The funds generated by the Permanent School Fund are distributed to school districts across the state

The Rainy Day Fund is more properly known as the National Research University Fund.

The Legislative Budget Board (LBB) plays an important role in the budget process in Texas.

Under Texas's budgetary system, there is no power to shift monies between agencies or programs when the legislature in not in session.

Taking into account increasing Medicaid and school district funding, the general revenue shortfall for the 2012-2013 biennium budget was

If Texas instituted a progressive income tax

Which statement regarding state-federal spending in Texas is true?

The LBB's draft budget, not the governor's budget, is the one voted upon by the legislature.

Appropriations bills work their ways through both the House and the senate simultaneously. When there is disagreement on two versions of a bill, the bill is reconciled by

The main purpose of the Permanent School Fund (PSF) is to

What action forced the legislature to bring the 2012-2013 state budget into balance?

Texas spending on a per capita basis is

Who prepares the BRE?

Texas maintains a balanced budget because the state Constitution requires it.