Sources of State Revenue/Personal Finance

1. Sources of State Revenue/Personal Finance

2. Sources of State Revenue It costs money to run a state government. Where does this money come from?

3. Sources of State Revenue Sales taxes-Also known as a “consumption tax,” a sales tax is paid on things that people buy and consume.These include items like cars or any merchandise you would buy from a store.

4. Sources of State Revenue Federal Grants- The U.S. government gives states federal grants to help fund education or build interstate highways.

5. Sources of State Revenue Personal income taxes- States and the U.S. government tax the earnings of individual citizens and the money they earn from investments. Taxes are due on April 15th each year.

6. Sources of State Revenue

7. Sources of State Revenue Property Taxes-Private homes, land, and business property are taxed according to their value. Property taxes are a major source of revenue for local government.

8. Activity Write T for true and F for False

9. Who Gets the Money? State revenue is distributed among state and local programs to provide citizens with services like education, roads, public transportation, and police and fire protection. Elected officials have to make choices to allocate limited funds for services that citizens need and want.

10. Who Gets the Money? How does a state decide how to spend its revenue? The Georgia Constitution requires that the state government operate under an annual budget. The budget details how much revenue should be available, how much the government plans to spend, and where the money will be spent. The General Assembly must pass legislation known as an “appropriation,” which permits spending from the budget.

11. Who Gets the Money? Many people and groups have input into the state budget. They include the governor, the Office of Planning and Budget (OPB), a state economist, top officials in state departments and agencies, the legislature, special interest groups, and the state auditor.

12. Activity Quick Quiz

13. So Many Choices… Spending choices are difficult because of the limited revenues of state and local governments. In addition, state law requires that the Georgia budget must be balanced. This means that spending cannot exceed revenues—in other words, the state operating budget cannot go into debt.

14. So Many Choices… The budget process begins in the spring when state agencies submit their budget requests. The head of each agency decides how much money he or she will need during the year. In the fall, the OPB looks over the requests and decides what items must be cut or modified.

15. So Many Choices… The OPB considers what programs are important to the governor and the performance of each agency in previous years. Finally, the governor’s budget proposal is presented to the General Assembly in January of each year.

16. Balancing a Budget The state of Georgia requires a balanced budget. What are the positives and negatives of a balanced budget?

17. Balancing a Budget The U.S. does not require a balanced budget. What are the positives and negatives of not having a balanced budget?

18. It’s Your Money, Honey! The personal money management choices that you make throughout your life are really important. The sooner you start with good money habits, the better off you’ll be in the long run. Money is not so important for what it is, but for what it can do. Money is the medium of exchange used to buy goods and services

19. It’s Your Money, Honey! Your income provides you with money to spend on whatever you choose. People earn income by giving their time and services to an employer, and receiving money in return.

20. It’s Your Money, Honey! People use credit to buy something now and pay for it later. When you buy something on credit, you usually have to pay the amount you borrowed plus an additional amount in interest. Banks make money from interest payments- interest is a fee paid for the use of someone else’s money.

21. Think about it If you use a credit card, how can you avoid interest charges?

22. Checks There are several forms of money Coins Debit Cards Currency

23. We can get credit as Loans (usually from banks) Credit Cards

24. Make Your Money Grow! You can save money under your mattress, or you can put it in a bank or credit union to earn interest. Saving money does more than give you extra cash when you need it. Saving allows you to increase your holdings by investing.

25. Make Your Money Grow! Some ways to invest money include: Stocks and bonds Collectibles Real estate Business (your own or someone else’s) Natural resources

26. Safeguarding Your Money The Great Depression of the late 1920’s and early 1930’s caused many financial problems. Many people who had money in banks lost some or all of it when their banks failed.

27. Safeguarding Your Money President Franklin D. Roosevelt and Congress made several changes. They created the Federal Deposit Insurance Corporation (FDIC) in 1933 to provide insurance protection for depositors if their banks fail. The guarantee says that up to $100,000 of a person’s money is safe. Since the start of the FDIC, no one has lost a penny of insured money because of a bank failure.