Study Questions

  1. What are the primary sources of revenue for states and localities?
  2. What is the difference between tax effort and tax capacity?
  3. What are some reasons for tax variation among the states?
  4. What are some options available to states for raising revenue?
  5. Who initiates the budget process in the states, and what restricts the power of the governor in advancing his or her agenda in the budget?
  6. What factors limit the use of discretionary spending in a state's budget?