Public Policy in Texas Chapter 12

REVENUES Texas revenues come from: State taxes (47%) Federal funding (36%) Interest on investments Revenues from public lands Licenses, fees and other minor non-tax sources Copyright © 2016 Cengage Learning. All rights reserved. 2

REVENUES Taxation National taxes State taxes General sales taxes- Broadly based taxes collected on the retail price of most items. Selective sales taxes (hidden)- Taxes levied on the sale, manufacture or use of specific items such as liquor, cigarettes, and gasoline; these are also sometimes known as excise taxes. Gross-receipt taxes Severance taxes Copyright © 2016 Cengage Learning. All rights reserved. 3

REVENUES Taxation (cont.) Local taxes—ad valorem tax: -sales tax -property taxes Copyright © 2016 Cengage Learning. All rights reserved. 4

REVENUES The Politics of Taxation The tax base: who should pay? Not all taxes are equally effective in raising funds for the public till Tax rate: The amount per unit of taxable item or activity. Tax base: The object or activity taxed. Broad-based taxes: Taxes paid by a large number of taxpayers. Copyright © 2016 Cengage Learning. All rights reserved. 5

REVENUES The Politics of Taxation (cont.) Regulatory taxes—designed to control isolated individual choices Benefits received tax—assessed according to the services received by the payers Ability-to-pay tax—apportioned according to taxpayers’ financial capacity Copyright © 2016 Cengage Learning. All rights reserved. 6

REVENUES The Politics of Taxation (cont.) Tax rates: progressive or regressive taxes? Progressive tax rates Increase as income increases Federal income tax Regressive tax rates Tax rate declines as income increases General sales tax Declining marginal propensity to consume Copyright © 2016 Cengage Learning. All rights reserved. 7

REVENUES The Politics of Taxation (cont.) Texas has one of most regressive tax structures among states Lower-income families pay disproportionate share Supply-side economics-- The theory that taxes on higher- income individuals should be kept low to allow them to save and invest to stimulate the economy. Copyright © 2016 Cengage Learning. All rights reserved. 8

HOW STATE AND LOCAL TAX BURDENS RANK AMONG THE 50 STATES Copyright © 2016 Cengage Learning. All rights reserved. 9

REVENUES Other Revenues Federal grants-in-aid Borrowing and other revenues General-obligation bonds Revenue bonds Other non-tax revenues: Various licenses, fines and fees Dividends from investments Sale and leasing of public lands Copyright © 2016 Cengage Learning. All rights reserved. 10

STATE SPENDING The Appropriations Process Allows legislature to legally authorize state to spend money The Politics of State Spending Many factors; competing interests Copyright © 2016 Cengage Learning. All rights reserved. 11

STATE APPROPRIATIONS BY FUNCTION, Copyright © 2016 Cengage Learning. All rights reserved. 12

EDUCATION Elementary and Secondary Schools History Recent trends School accountability standards-- Using measurable standards to hold public schools responsible for their students’ performance and teachers’ competence. Privatization--to increase competition. Copyright © 2016 Cengage Learning. All rights reserved. 13

EDUCATION Elementary and Secondary Schools (cont.) Public school administration State administration Independent school districts Charter schools-- Publicly funded, privately managed schools that operate independently from the district system. Copyright © 2016 Cengage Learning. All rights reserved. 14

EDUCATION The Politics of Public Education Curriculum The curriculum and the culture wars Textbooks Faculties Copyright © 2016 Cengage Learning. All rights reserved. 15

EDUCATION The Politics of Public Education (cont.) Students Public school finance Federal State Local → ad valorem property taxes School privatization Copyright © 2016 Cengage Learning. All rights reserved. 16

EDUCATION Higher Education Administration of colleges and universities The Texas Higher Education Coordinating Board Community college approach Copyright © 2016 Cengage Learning. All rights reserved. 17

TEXAS PUBLIC HIGHER EDUCATION– ENROLLMENTS, FALL

EDUCATION The Politics of Higher Education Faculty issues Financial issues Student accessibility Student diversity Affirmative action Student retention Quality Copyright © 2016 Cengage Learning. All rights reserved. 19

FULL-TIME TEXAS RESIDENT TUITION AND FEES PER YEAR Copyright © 2016 Cengage Learning. All rights reserved. 20

HEALTH AND HUMAN SERVICES Health Programs Direct health services State health-insurance programs Medicaid Children’s Health Insurance Program (CHIP) Medicare Copyright © 2016 Cengage Learning. All rights reserved. 21

HEALTH AND HUMAN SERVICES Health Programs (cont.) Private health insurance The uninsured 1 in 4 Texans has no health insurance Highest percentage of uninsured residents Health Care Reform Affordable Care Act (ACA): The comprehensive federal health-care reforms designed to expand Medicaid coverage, to limit objectionable insurance company practices, and to make subsidized health insurance available to businesses and individuals through competitive insurance exchanges. Copyright © 2016 Cengage Learning. All rights reserved. 22

HEALTH AND HUMAN SERVICES Income Support Programs Temporary Assistance to Needy Families (TANF) Unemployment insurance-- The insurance program designed to provide compensation as a partial income replacement for those who have lost their jobs; it is a social insurance program financed with taxes paid by employers. Texas Workforce Commission Copyright © 2016 Cengage Learning. All rights reserved. 23

HOW PEOPLE GET HEALTH INSURANCE: PERCENT BY INSURER Copyright © 2016 Cengage Learning. All rights reserved. 24

HEALTH AND HUMAN SERVICES The Politics of Welfare and Income Redistribution Defining welfare Unearned, government-provided benefits Corporate welfare Welfare myths Welfare realities The causes of poverty Income redistribution: A public policy goal intended to shift income from one class of recipients to another, regardless of whether these programs are designed to benefit lower-, middle-, or upper-income groups. Social insurance: Public insurance programs such as Social Security and unemployment compensation in which eligibility is based on tax premiums paid by the beneficiaries or their employers rather than need alone. 25

TRANSPORTATION Highway Programs The Politics of Transportation Highway privatization Mass transit-- Transport systems that carry multiple passengers such as train and bus systems; whether publicly or privately owned, mass transit systems are available to the general public and usually charge a fare. Copyright © 2016 Cengage Learning. All rights reserved. 26