1. Revenue Scarcity
-Revenue is limited, so government
must make choices about spending
-setting priorities
-Political Party goals

2. Budgets
-Budgets are a plan for spending the
government’s money
-Revenue or receipts-- Economic
term for the money that is
received
-Expenditures-- Economic term for
the money that is spent
-Most budgets are one year budgets
-fiscal year

3. Drafting a Budget
-drafting a budget is a long process
-executive branch prepares most of
the budget
-expenditures are often based upon
the President, Governor, or local
leader’s goals

4. Drafting a Budget
-drafting a budget is a long process
-executive branch prepares most of
the budget
-expenditures are often based upon
the President, Governor, or local
leader’s goals

5. Approving a Budget
-Budgets must be passed by the
legislative branch
-serves as a check on the
government’s spending power
-Goals of Congressmen may conflict
with budget proposals
-Final version is often a series of
compromises

6. State & Local Budgets
-Similar budget process as Federal
Government
-May be of a much smaller scale
-May be more important to citizens
of the community than federal
budget

7. Expenditures
-Expenses change each year
-Most larges expenses change very
little
Social Security, National Defense,
Medicare, and Interest on
National Debt
-Local and State Governments
Education, Social Services,
Transportation, and Public Safety

8. Budget Deficits
-Limited Revenues, but unlimited
places to spend money
-Some spending is actually borrowed
money to pay for expenses
Bonds
-Effects of National Debt

9. Balancing Budgets
-Balanced Budget-- Idea that a
budget should never spend more
money than it has received
-Federal Government has a history
of high budget deficits since the
1980’s leading to a high national
debt
-Most states and local government
are required to balance their
budgets

10. Revenue Sharing
-Governments sometimes help one
another with funding problems
-Intergovernmental Revenue
-Governments can receive grants to
help solve problems
-Federal Grant-In-Aid
-Federally mandated programs and
funding is a problem for many local
and state gov’ts