State And Local Finance

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Finance

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University at Albany

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eco 356

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ECO 356 State and Local Finance

Fall 2020

Name_______________________________________

Class Time___________________________________

Question One

TAX = EXP. From day one of this class, we discussed how the study of State and Local

finance is inherently different from the issues addressed by Federal Government in their

respective budgets. The article below is a great example of the fiscal choices that

State/Local governments make. How States and localities will manage through this crisis is

dependent upon their prior fiscal choices. What are the differences between what the

Federal government can do, and what the states and localities can do? What are the

implications? You should discuss why these differences matter. Your answer should

include specific examples.

Solution

The Federal government is accountable for the national affairs’ conduct. Its fields of

responsibility include foreign and defense affairs; trade, currency, and commerce; postal

services, immigration, broadcasting, and telecommunications; pensions and social services; and

air travel. Also, it helps finance a lot of activities largely conducted by the states like education,

health issue like the Covid-19 crisis, industrial relations, environmental issues, education, and so

forth (Light, 2017). Generally, it’s the only type of government that has the capacity to regulate

foreign and interstate commerce, declare wars, and set taxation. The states and localities, on the

other hand, focus on saving money and acquire resources to prepare and reinforce themselves for

anticipated challenges.

The states are struggling to find money to help them respond to health issues,

counterbalance the rapid drops in tax revenues, and sustain basic services. In other words, the

states and localities plan and pay several roads, run schools, organize fire and police services,

provide water, license professions, create zoning regulations, and arrange their citizens’ elections

(Rosewicz et al., 2020). For instance, the state leader is encouraging the congress to offer $500

billion in the supplementary federal relief to assist with stabilizing the state budgets, together

with other forms of support. Differentiating between what a federal government can do with

what the state and localities can do enable one to distinguish between the roles or functions of a

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ECO 356 State and Local Finance Fall 2020 Name_______________________________________ Class Time___________________________________ Question One TAX = EXP. From day one of this class, we discussed how the study of State and Local finance is inherently different from the issues addressed by Federal Government in their respective budgets. The article below is a great example of the fiscal choices that State/Local governments make. How States and localities will manage through this crisis is dependent upon their prior fiscal choices. What are the differences between what the Federal government can do, and what the states and localities can do? What are the implications? You should discuss why these differences matter. Your answer should include specific examples. Solution The Federal government is accountable for the national affairs’ conduct. Its fields of responsibility include foreign and defense affairs; trade, currency, and commerce; postal services, immigration, broadcasting, and telecommunications; pensions and social services; and air travel. Also, it helps finance a lot of activities largely conducted by the states like education, health issue like the Covid-19 crisis, industrial relations, environmental issues, education, and so forth (Light, 2017). Generally, it’s the only type of government that has the capacity to regulate foreign and interstate commerce, declare wars, and set taxation. The states and localities, on the other hand, focus on saving money and a ...
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Tags: International Commerce Federal Government finance entity US trade with foreigh allies government program to address covid The fiscal health areas