Cafr – Budget Analysis
* State of Connecticut * CAFR – Budget Analysis * Nondiscretionary Fiscal Policy
Nondiscretionary fiscal policy is characterized by government policy that is enacted with the intension of either stimulating or stifling the economy to meet the economy’s needs.
Present day fiscal policies are often a result of nondiscretionary fiscal policy enacted years ago and serve a present-day purpose of stabilizing the economy. For this reason, actions of nondiscretionary fiscal policy are often referred to as “built-in stabilizers (Guell, 2010).
An example of nondiscretionary fiscal policy (US) is the progressive tax rate system which operates on the basis that the more money earned, the more taxes paid. These laws were enacted years before, yet serve as the standard for determining individuals’ applicable tax brackets. * The Impact NDFP has on Government Revenue and Expenditures
Governmental entities have the power to enforce collection of taxes, which serve as a large percentage of governmental revenue. The amount of taxes required to be paid is regulated by fiscal policy.
Government expenditures are dependent on the budget that must conform to NDFP.
How do these ideas coincide?
Example:
According to fiscal policy, a government collects (x%) of property taxes, which are recognized as revenue. These taxes are spent on budgeted highway reconstruction projects which are recognized as expenditures. * How does the Impact of NDFP on Govt Revenue and Expenditures Apply to the State of CT?
The budgeting process of the State of CT functions as such:
Governor submits state budget to General Assembly every other year, which is then enacted by the GA through passing appropriations acts that cover the following 2 fiscal years and establishes revenue estimates for several funds, some of which include: * General Fund * Transportation Fund * Worker’s Compensation Administration Fund * Consumer Council and Public Utility Control Fund *
Nondiscretionary fiscal policy is characterized by government policy that is enacted with the intension of either stimulating or stifling the economy to meet the economy’s needs.
Present day fiscal policies are often a result of nondiscretionary fiscal policy enacted years ago and serve a present-day purpose of stabilizing the economy. For this reason, actions of nondiscretionary fiscal policy are often referred to as “built-in stabilizers (Guell, 2010).
An example of nondiscretionary fiscal policy (US) is the progressive tax rate system which operates on the basis that the more money earned, the more taxes paid. These laws were enacted years before, yet serve as the standard for determining individuals’ applicable tax brackets. * The Impact NDFP has on Government Revenue and Expenditures
Governmental entities have the power to enforce collection of taxes, which serve as a large percentage of governmental revenue. The amount of taxes required to be paid is regulated by fiscal policy.
Government expenditures are dependent on the budget that must conform to NDFP.
How do these ideas coincide?
Example:
According to fiscal policy, a government collects (x%) of property taxes, which are recognized as revenue. These taxes are spent on budgeted highway reconstruction projects which are recognized as expenditures. * How does the Impact of NDFP on Govt Revenue and Expenditures Apply to the State of CT?
The budgeting process of the State of CT functions as such:
Governor submits state budget to General Assembly every other year, which is then enacted by the GA through passing appropriations acts that cover the following 2 fiscal years and establishes revenue estimates for several funds, some of which include: * General Fund * Transportation Fund * Worker’s Compensation Administration Fund * Consumer Council and Public Utility Control Fund *