1. 23.4 What taxes are used to support state governments?
About half of all state dollars come from taxes
Sales tax
Great Depression (30s)
General: most goods (not groceries)
Selective/Excise/Sin: gas, liquor, cigarettes, etc.
Income tax
Tax on wages and business profits
Others
License fees, severance, estate, property taxes
Types of taxes
Regressive: affects low income people more
Progressive: affects people according to ability to pay
Proportional: affects all people at the same rate

2. 23.4 Where else to states get funding?
Bonds: government IOU
Lotteries/gambling
3/4 of states use
50% spent on prizes, 6% on admin.
Intergovernmental Revenue
Money distributed by one level to another
20% of State dollars come from Feds
Most money in grants
Categorical-formula: specific programs/matching funds
Block: large grant for general purpose
Mandates: formal order by a higher authority
Federal dollars attached to mandates
Sometimes requirements exceed grant $ (unfunded)

3. * How does Ohio’s budget process work?
Ohio’s budget is approximately $40 billion
Education makes up half of this
Budget must be balanced (debt is limited)
Biennial budget
2 years
FY runs from July 1 to June 30
FY03 ends June 30, 2003, etc
Timeline
July of even-year: OBM considers agency requests/recommends
Jan of odd-year: Governor presents executive budget (*new)
Spring odd-year: House considers (Finance Committee)
Senate considers after House passage
By June 30 odd-year: Conference committee
By June 30: Governor signs
Line-item veto
Interim appropriations bill can be used if process is delayed