Case Study On Budgeting Of Alabama State

1) Limitations on debt are part of any state constitutions. In particular, the Alabama Constitution limits the state expenditures to turnover expected every year. The aim of debt limits is to protect citizens from excessive burden. Authorities or firms have been created to assume the burden of debt. Further limitations prohibit incurrence of debt for private purposes and provide an absolute restriction on debt for capital improvements.
The budgeting is held back by the budgeting isolation, income tax limitations and the huge number of limitations on the land tax. These kinds of limitations influence the flexibility. The outcome is that expenditure taxes affect negatively the value of bond ratings and increases expenditures at a local a national level.
The methods to avoid such restriction limits are several; modify the process to tax population is the first one. In particular, eliminating exemptions would improve tax structure, creating a more efficient and balanced tax system. The new system would be targeted mostly among the main taxes which are property, sales and income. Considering that the actual restrictions on property and income taxes contact the balance, constitutional revision can be considered an option. A method is to eliminate all the constitutional restrictions. Another method is to rewrite from the beginning the articles regarding taxes and finance.
2) The State's controls on cash in Alabama are fiscally very conservative. The State Controller is prohibited from drawing warrants on the State Treasury unless there is money on hand to cover those warrants. Moreover, at the end of the fiscal year, obligations like accounts payable cannot exceed the available cash balance (cash less warrants payable).
Finally the cash control is enforced by automated edits with the target to return positive fund balances, following the generally accepted accounting principles (GAAP).I believe those controls are necessary because they help people to exercise their civil rights, to define the powers of government, and to set up the institutions.