Overview_Public_Finance

Financial Overview Paper Carlos J. Negron MPBL-592 Septmeber 12, 2011 Prof. David Rouan Describe the government's capital project, general, and proprietary funds Federal taxes have to be paid in order for a government to keep a country running. There are different kinds of taxes that help every state and their local government. Federal taxes pay for welfare programs, funding for science and art, military and defense projects, education, and national infrastructure. State income taxes are used to help the state maintain itself and provide support to local government offices. These local state taxes provide unemployment benefits, maintenance for parks, arts programs, statewide police, welfare programs, education stipends for school district, and public recreation. Florida income taxes are used to support cities and townships. These taxes are used to support schools, libraries, community centers and their programs, police protection, utility and street maintenance, and parks and their facilities. These taxes also help with the city wide waste management, sewage processing and countless other services that keep a city running. Property taxes in Florida are used to help fill the state and local government coffers. County governments in Florida rely on this taxes to be able to upkeep the outside of the city borders. School taxes in Florida are very important these are used directly on all local school systems. With these taxes books, schools, teachers, programs and classes are used to pay for them. Budget Analysis Florida's budget continues to go from bad to worst. State economist believe that Florida's budget will start to get worst again. These can bring a gap in Florida's budget by billions. These shortfall is the result of lower tax collections in a really slow economic recovery. Since it is forecast for the budget to be less than previous years this is going to affect by getting a budget cut to schools, health care for the poor and the elderly, prisons, courts, road building programs, and environmental programs. According to Florida's Budget Shortfall Forecast Grows, Making Tax Cuts Look Harder (2011) The forecast is significant because it forms the backbone of the financial assumptions lawmakers will use this spring to cobble together next year's budget. This year's budget is $70.4 billion; Scott wants to reduce it to about $66 billion. The plan to phase out corporate taxes to entice business for South Florida will be offset because businesses will not want to move were budget is cut by a certain percent. “State workers could bear the brunt of the bad budget times. The Legislature plans to force them to divert more of their salaries into their retirement plans, a move that has the effect of a pay cut that ranges from 2 percent to 5 percent, depending on the proposal.”(Florida's Budget Shortfall Forecast Grows, Making Tax Cuts Look Harder, 2011). College students could also be affected by this because they could face a increase in their tuition. Also, Medicaid could have their benefits reduced and cut. The Florida budget got cut this year and it seems like it will be cut next year too. According to Florida State Budget “Nearly $4.8 million to public television and radio Stations. Nearly $14 million from the various University of South Florida campuses. A request by the Tampa Bay Area Regional Transportation Authority to roll over its unspent balance. $305 million in a state trust fund for environmental land acquisition. Three line items for Daytona State College: $7.8 million for a remodel of and addition to the News-Journal Center, $2.4 million for remodeling the college's existing theater center and $3.012 million for renovation of a classroom building and air conditioning system improvements that college officials said would save $200,000 a year in energy costs. $10 million appropriation for St. Johns River restoration. $12 million for a national veteran's homeless support group. $6 million in economic aid to the Florida Panhandle. $165 million for construction, remodeling and renovation projects earmarked for Florida's universities, state colleges and K-12 public schools. $278.8 million from the Division of Emergency Management, approximately 40 percent of the agency's budget.” Main revenue sources Individual income taxes and payroll taxes are part of the five federal revenue dollars. Corporate taxes are another contributor to this. The balance is made up of gift and estate taxes, miscellaneous receipts, and excise taxes. Over the course of the years tax revenue has changed, with payroll taxes increasing, and corporate income and excise taxes going down, but the share that is provided by income taxes has remained more or less the same. The individual income tax has been the biggest source of revenue since the 1950's. Pay roll taxes increased with the creation of Medicare. With the combination of taxes for medicare and and social security taxes payroll tax revenue went up. Payroll taxes also include federal workers' pension contributions, unemployment insurance, and railroad retirement. The remaining sources of revenue have fluctuated less. The individual income tax has provided almost half of the total revenue while other revenue sources have inevitably disappeared. Describe the long-range spending and short-range spending plans. The governor of Florida proposed spending almost $66 billion which is $4.6 billion less than this year's budget. The governor wants to also eliminate a 7% of state government jobs. This means that a lot of employees from the government would be laid off. Although all these employees would be laid off and would help increase the unemployment rate the governor says that it would improve the state economy by downsizing the government and cutting revenues. Big cuts to education could be a big problem for state children. They would be hurt by the educational environment. Many schools would be affected when it comes to supplies and other learning materials. Businesses are actually interested in how the educational system is and if the government is cutting the budget for schools, businesses won't be attracted to do business. The governor's budget proposal is viewed as an extremely tough sell because his plan is to make a lot of cuts and changes to the government in a small amount of time. The budget cuts for school would be around 154 millions overall. Besides the budget cut and the spending the Governor would want employees to contribute with their pension funds. The governor of Florida would also like to cut property taxes for two years and also income taxes at the same time. The Governor is not going to downsize all government services. The governor is actually increasing the staff of the Executive Office of the Governor. He wants 800 million dollars to spend on economic development programs. The Department of Community Affairs is the agency that is going to suffer the biggest cuts. The water-management district is another agency that the Governor wishes to make cuts to. The prison system would loose the majority of it's staff under the new budget . The Governor also suggested that instead of cutting funds for the prison system that is should become privatized. According to the Governor this budget should reshape that state. Departments/programs receive the largest appropriations There are many governmental departments in Florida. There are many departments that receive appropriations. Schools are one of the many departments that receive funding even though it is being cut. The budget does not include a tax increase and does not increase state fees. The budget is bolstered by $2.6 billion in federal stimulus money, then this is allocated in public schools. The budget transfers a total of $506.9 million in trust fund money into the general revenue pot. Millions come from state transportation trust fund and other funds from local government housing trust fund. Medicaid was another source were a lot of money was approved. Medicaid alone is one quarter of the state budget. The state expects to receive $800 million for Medicaid and $555 million for education. The Legislature had included the Medicaid money in the state budget on a contingent basis. References Budget of the United States Government, Fiscal Year 2008, Historical Tables, Table 2.1 Receipts by Source: 1934-2012

 Congressional Budget Office, A Preliminary Analysis of the President's Budget and an Update of CBO's Budget and Economic Outlook, March 2009, Tables F-3 and F-4
 "Florida budget negotiations in final stretch" April 25, 2010 Marc Caputo, Times/Herald Tallahassee Bureau In Print: Saturday March 19, 2011.http://www.tampabay.com/news/business/economicdevelopment/floridasbudget-shortfall-forecast-grows-making-tax-cuts-look-harder/1158262 U.S. Congress Joint Committee on Taxation, “Selected Data Related to the Federal Tax System,” JCX-11-07, March 14, 2007