What are three common budgeting features shared among state and local governments?

Question

What will be an ideal response?

Answer 1

One feature is that state and local governments must balance their budgets because unlike the federal government, they cannot print money and engage in long-term borrowing to cover their operating deficits. There are several things state and local governments can do if they suffer a temporary shortage, but they cannot establish the same patterns of debt that characterize federal budgeting. Another feature is state and local governments distinguish between their operating budgets (day-to-day functioning) and capital budgets (long-term expenses). GAO has campaigned to create a capital budget for the federal government, but this has not happened. States and local governments take out loans to cover capital expenditures but taxes go to operating budgets. Finally, in some state and local governments, everything shuts down if the budget is not passed by the start of the new fiscal year.