e revenue portion of their 2. States differ with respect to how they handle th g
ID: 2328193 • Letter: E
Question
e revenue portion of their 2. States differ with respect to how they handle th gets. a. Who does revenue forecasts for your state budget? Is it an exe b. What entity in your state government prepares revenue estimates for tax c. Does your state develop a tax expenditure budget? If so, what are the lar or a legislative branch agency or a consensus process? islation? Are the estimates easily available on a state website? tax expenditure categories for the two taxes that generate the most revenue for the state? Does the tax expenditure budget identify the normal structure for each of those taxes?Explanation / Answer
a. Every state estimates the amount of revenue will be collected in the upcoming fiscal year. Revenue forecasting is a key component of budget development. Since states are required to balance their budgets, it is crucial for policymakers to have access to timely revenue estimates to take and inform budgetary decisions. A reliable estimate is required to building a responsible budget and sets a benchmark for how much funding the state will be able to provide to public services. States vary in their forecasting approaches and the agencies responsible for revenue forecasting. Around half of the states reported using a consensus revenue forecasting group, typically comprised of representatives from the executive and legislative branches, and sometimes appointed citizen experts from academia or business. In states without a consensus forecasting process, the executive and legislative branches may prepare their own forecasts independently, or the forecast may be developed solely by the budget officer.
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