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Comparing and Contrasting Levels of the Government
Various disparities exist in the distribution and spending, not only between the various levels of governance, but also within each level. However, a relationship exists between finance and budgeting in public organization and the level at which a governmental organization is operating.
As a way of example, as Yilmaz et al. reckons, “State’s and local government’s general revenues averaged $5,851 per capita and ranged from $4,694 per person in Arizona to $11,246 in Alaska for FY 2002” (2002, p.10).
Additionally, the general spending of the government was about $4,746 for every resident of Arizona to $13,172 for every Alaskan. Such disparities are perhaps indicative of the myriads of fiscal decisions that states need to either consider subject to necessity or alternatively out of preference in an endeavor to escalate revenues depending on the underplaying conditions.
Because of these disparities, the finance and budgeting in public organization suffers in the sense that the state and federal governments have a prerogative to ensure a more even distribution of the government expenditure in the provision of essential services. Yet, at the local government level, the revenue generation and or expenditures might be significantly different.
The revenue and the expenditures at various levels of governance may change depending on the resource endowments and or the productivity. Increased expenditure translates to a need to raise more revenue to fund the expensive programs.
Consequently, as Yilmaz et al. (2002) categorically states, “high revenues and expenditures reflect both the relatively painless cost to residents of raising revenues by taxing natural resources” (p.10).
The functions of the government organizations predominantly rest on the need to ensure a more unified distribution of wealth across all states. However, the functions of government organizations depend on individualized finance and budgeting plans.
Consequently, states and their local governments may end up making decisions that would enable them hike their revenues to fund their differing budgets differently. One such ample strategy would entail focusing on increasing revenues and cutting on the expenditures. According to Yilmaz et al. (2002), one can achieve such a strategy by “promoting tax base growth or reducing long-term Costs of public service delivery” (p.11).
More often, states normally have fewer options available to them to ensure that they are able to cut costs or rather cut programs to enhance the increment of the tax rates in an endeavor to balance their budgets. Moreover, demographic economic traits immensely contribute to how states, federal and the local governments arrive at the necessary decision for raising revenues and cutting costs.
The key expenditures on the key government budgets appear within the various functions that the various levels execute. However, some clashes exist, meaning that some service provisions fall under the hands of several levels of government.
According to IRS (2010), Federal governments deal with “Defense, currency regulation, and foreign relations” (Para 3). In addition, the federal government “has a responsibility to health, education, welfare, transportation, and housing and urban development” (Para 3). Their budget must the incorporate all these expenditures.
On the other hand, states’ government has noble roles in allocating funds for the enforcement of “state criminal code, working conditions, internal communications, and regulations of the property, industry, business, and public utilities” (Para 3).
Finally, the local government budgets incorporate items such as housing, police, health regulations, public transportation, fire protection and education amongst others. Evidently, some similar expenditure appears in two or more levels of government.
Revenues and expenditures relate to different levels of government differently. One common trait among all levels of government is that they raise income through the taxation of the citizens.
However, the decision on how and on what to impose a tax is a decision made by every level of government independently. Good part of the federal government revenue comes from income taxes. Local and states taxes come from transaction taxes and property taxes.
Reference List
IRS. (2010). Understanding Taxes. Retrieved from <https://apps.irs.gov/app/understandingTaxes/index.jsp>
Yilmaz, Y., Hoo, S., Nagowski, M., Rueben, K., & Tannenwald, R. (2002). Measuring fiscal disparities across the U.S. States: a representative revenue system/ representative expenditure system approach fiscal year 2002. Washington: The Urban Institute.
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