Examples of New Approaches to Develop Sources of Public Revenue
Based on information shared in the interview, there are many approaches that state governments can use to develop sources of public revenue. However, one of the major strategies that emerged in the discussion is formulating and executing effective and efficient tax reforms. As explained by the governor of Michigan, tax reform will enable to generate more revenues, especially by expanding the tax base while at the same time encouraging entrepreneurship and investments (Forbes, 2014). The tax reforms should be attractive to businesses that are the major taxpayers. The second major approach that can be used to develop sources of public revenue is to increase productivity through the use of appropriate technologies. Organizational and individual productivity is likely to increase incomes for state and national governments. However, as explained by the governor of Indiana, it is critical for the states to live within their means.
Issues and Challenges in Leading Budget and Fiscal Reforms in Government
The main issue affecting the budget and fiscal reforms in government is the lack of proper coordination and collaboration between state and national government. A state may be interested in introducing some fiscal reforms but fails to get enough support from the national government. A good example that emerged in the discussion is the intention to introduce internet tax by some states, which was not supported by the federal government (Forbes, 2014). At the same time, it emerged that skills gap in the country may be a challenge of leading budget and fiscal reforms in the government, especially when there is a shortage of highly skilled economic and financial experts. It is essential for state and national governments to address the identified issues and challenges.
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The Inter-relations between State Government Budget Issues and the National Economy
The budget of state government is highly influenced by the general performance of the entire economy in the whole country (Lee & Johnson, 2008). A state may have an adequate budget, but it may not achieve its goals when the national economy is not growing. A stable economy is needed to maximize revenues at the state levels. Therefore, state government issues are influenced by the performance of the national economy.
References
Forbes. [Forbes.com]. (2014, April 4). A Government of growth: Politics and policy that foster innovation . [YouTube]. Retrieved from https://www.youtube.com/watch?v=0Im6gY0eviA
Lee, R.D. & Johnson, RW. (2008). Public budgeting systems (8th ed.). Sudbury, MA: Jones and Bartlett.
