Checks on Other Branches
In many states the legislature
must approve officials and
judges appointed by the
governor.
They also examine how well
Moreover, they are
provided with the power
to impeach executive and
judicial officers in a
similar process followed
in Congress.
executive agenciesdepartments, committees,
boards, and offices of the
executive branch are doing their
jobs.
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Taxes are the primary source of revenue for statesmore than 50%. The funds are generated from two
forms of taxes: 1. Sales Tax 2. Income Tax
Sales Tax: Many states have two types of sales tax on
goods or services purchased within the state.
1) A general tax placed on all goods and services
within the state. Usually it is a percentage of the
price of the product. In Ohio, the tax varies from
one county to another.
On April 1, 2012 the sales tax in Stark County
will increase from 5.75% to 6.25%. So the price
of a $20 dollar t-shirt will be a total of
$21.25….an increase of 10 cents.
2) An excise tax on specific goods:
tobacco, gasoline, and alcohol.
In Ohio a pack of 20 cigarettes is taxed
$1.25 (Federal taxes also apply)and
when purchased in Cuyahoga County,
an additional $.345 tax is added.
Income Tax: Most states
tax income on what a
person or business earns.
Ohio has a 9 income tax
brackets with minimum
of 0.59% a max of 5.92%.
States also impose other taxes or
user fees for services and
products.
Example: Lumber and mining
companies are charged a severance
tax on timber, gas, and oil taken from
the land. All states have fees for
obtaining licenses including hunting,
driving, fishing, and when registering
a pet.
States can choose which taxes they wish to use.
Montana has no state sales tax. Texas has no
state income tax. Alaska relies on natural
resources so it has high severance taxes. Ohio
doesn’t tax most food products while
Pennsylvania doesn’t tax clothing.
Federal Funds
States have also turned to Congress for money.
Money is often provided in two forms. 1.
Categorical Grants 2. Block Grants
Categorical Grants: given for
specific purposes such as job
training and highway
construction. They often have
“strings attached” or
conditions that must be met
in order to receive money.
EXAMPLE: July 17, 1984 the National Minimum
Drinking Age Act of 1984. Required all states to
raise the age of consumption and public
possession of alcohol from 18 to 21. Under the
Federal Highway Act, any state that continued to
have a drinking age below 21 would receive a
10% reduction in its annual federal highway
funds.
Block Grants: Provided for
general purposes. A categorical
grant could be obtained to fund
health care for the homeless,
while a Block grant could be
used for health care in general.
Those in favor of block grants
claim that it gives governors and
state legislatures more control
over how and where the money
is spent.
States can borrow money by selling Bonds.
Bonds are certificates people buy from the
government in which the government agrees to
pay back the cost, plus interest after a set period of
time. States often use this method to raise money
for constructing a school or convention center.
State lotteries also provide funds to
states. 60% of the cost of a lottery ticket
goes to toward the prizes, the
remaining 40% goes to the state- often
for education programs.
Lotteries are often
used to fill the gap
between tax revenues
and the cost of state
programs.
However, in most states no
more than 5% of the total
revenue comes from the
lottery and it cannot “bridge
the gap”. Opponents to the
lottery claim that any form of
gambling is wrong and that it
targets those who can least
afford it- the poor.