Course Number:            PUBP  741.01

 

Course Title:              Government Finance in the United States: Policies and Processes

 

This course examines at all three levels of government (federal, state and local) the design and operation of expenditure and revenue systems.  The key process of mobilizing and allocating resources through the planning, adoption, and execution of the budget is stressed.  In addition to examining the underlying theory and policy objectives of various tax and spending regimes, the course will undertake a systematic review of the tools involved in management control, performance measurement, cash and debt management, and public sector accounting and financial reporting systems.  Emphasis will be placed on case studies and analytical methods.  Parallels are drawn with the financial operations of non-governmental entities. 

 

Class Dates:               Thursdays:  7:05 P.M. - 9:35 P.M.

                                                1st Class -- January 24, 2002

                                                Last Class - May 2, 2002

                                                Final Exam - May 9, 2002 (regular class time)

 

Course Objectives

and Description: This course provides an introduction to and survey of public sector financial policy and management in the United States. It will examine the processes of taxing and spending and the principal institutions involved in the management of governmental resources.  The course’s scope covers both federal and state and local government institutions and processes. 

 

                        Government finance will be largely approached from a management point of view.  At the federal level, we examine the major issues facing the national government such as controlling the growth in federal spending, the consequences of economic cycles, effects of tax reform on the federal budget, changes in federalism, and efforts to reform the federal budget process.  Other objectives of the course are to gain insight at all levels of government into the institutional roles in budgeting, to become familiar with basic terms and concepts in public finance, and to develop an insight into the role of budgeting in policymaking.

 

                                               

Instructor:                               John E. Petersen (703) 273-2653 (H)              (703) 807-5700(W)

                                                 eMail  gfg@compuserve.com  and ____@gmu.edu

 

Method of

Instruction:     This course will be taught as a survey course. Many topics will be covered.  Some topics will not be as thoroughly as one might desire.  While this is not a seminar, but it is expected that you will participate in class discussion. That  participation should demonstrate an understanding of the course assignments (please read ahead)  and a familiarity with current developments in the field of public budgeting and finance.  

 

Requirements: Keep abreast of current issues in government finance by reading at least one newspaper with national coverage (Wall Street Journal, Washington Post, New York Times, Financial Times).

 

                        Participate actively in class discussions.

 

                        Do presentations, complete research papers satisfactorily and pass examinations.

 

Class              

Presentations: During the semester, you need to stay informed on current developments that are relevant to government finance.  Therefore, as part of your class participation grade, you will be assigned brief, 5-minute individual presentations to be made about current news items dealing with public finance.  These can be based on clippings from newspapers, magazines, newsletters, or professional journals.  Federal, state, and local government finance topics are all fair game.  Your presentation should summarize the news item and then relate it to some concept, practice, or problem in public financial policy and management, including your observations on its implications.  Please submit a one-page outline of your presentation to me when you give your presentation.

 

                        I will hand out a schedule of the presentations at the third class session and there will be presentations at most sessions starting thereafter.

 

Interest

Profile:                                    Please write a brief (not more than one page) profile telling about your                                                        background, graduate-level course work, your career aspirations, and your                                                     expectations from this course. 

                        Please submit the interest profile to me no later than the February 7 class session.

 

 

Research

Paper:             One research paper will be assigned during the semester.  It is not to exceed 10 pages, double-spaced, including any charts or graphics, footnotes and references. I’d greatly appreciate 12 point type size. You may select a topic of interest to you in the area of government financial management or policy at the federal, state or local level.  The topic is subject to my approval.  If you wish, you may select one from a list of topics that I will provide.

 

                        The paper should deal with topics that we will be covering in this course and should demonstrate your ability to define the problem, point out its significance and make a reasoned argument as to why proposed or attempted solutions are, or were, better or worse, successful or not.

 

                        Please have your research paper topic submitted no later than the February 21 class session and approved by me no later than February 28.  Research papers are due on or before April 11. Instructions will be provided concerning delivery. 

 

Books & Materials                    John Mikesell Fiscal Administration (5th edition) Harcourt Brace

                                                Allen Schick The Federal Budget: Politics, Policy, Process (2000 revised                                                                         edition) Brookings Institution Press

Commission on Virginia’s State and Local Tax Structure: House Document                            22, Commonwealth of Virginia (2001)

                                                District of Columbia: Tax Rates and Tax Burdens (2001)                                                                                      Handout Readings for PUBP  741

 

Quiz:                                       There will be a brief 40-minute quiz at the beginning of the March 7 session. This is intended to give both you and me an early indicator of your understanding of the material covered to that date. The quiz will consist of short answers and definitions. 

 

Grading:         Weights for the course grade will be as follows:[1]

                                                            Quiz                                         10%

                                                            Research Paper                       30%

                                                            Class Participation                 10%

                                                            Class Presentation                  10%                                                                                                                 Final Examination                  40%

 

Office Hours:                         I will be available before class at the hours given below or in my office by appointment.  My normal office hours for meeting will be 4:00  PM to 6:00 PM on most Wednesdays and Thursdays. Other times are possible.  If you wish an appointment, please call (703) 807-5700 or (703) 273-2653 (Home) ahead. My university emial address is _____@gmu.edu or gfg@compuserve.com.  My office room number is _________.

 

Course Schedule: (Subject to amendment)

 

January 24       Introductions, scope and objectives of course, discussion of presentations and research papers.

                       

                         Readings: Mikesell, “Introduction”

                       

January 31:       The Logic of the Budget and Accounting Concepts:

 

                        Readings: Mikesell: Chapters 2 to 4

                                                                          Schick:    Chapters 1 to 3

                                                                         Handout:  Petersen:  Accounting  Concepts

 

February 7:      PERSONAL PROFILE DUE

                        The Federal Budget Concepts and Techniques.  The budget and fiscal policy.  Role of federal budget in the economy.

 

                        Readings:   Schick:  Chapters 4 to 7.

 

February 14:    RESEARCH PAPER TOPIC DUE

                        More on the Federal Budget and Financial Control Processes

                         

                        Readings: Schick: Chapters 8 - 11

 

February  21    Concepts of Income Taxation.  Principal sources of revenues; the concept of taxes as benefits in the form of tax expenditures and other subsidies; alternative revenue sources and user fees.

 

                        Readings: Schick:  Chapter 7  (review) .

                                                                        Mikesell:   Chapter 6 and 7

 

February 28:    State and Local Government Taxes. Property, sales and other taxes

 

                        Readings : Mikesell:  Chapters 8 and 9

March 7:            QUIZ AT BEGINNING OF CLASS

                        User Charges, Fees, Enterprise Finance & Privatization.

                                               

                        Readings: Mikesell:  Chapter 5 and Chapter 10

                        Handout:  LMI; "Public/Private Ventures"

 

March 14:                                NO CLASS

 

March 21:        Tax Administration, Forecasting, and Intergovernmental Transfers:

                       

                        Readings:  Mikesell, Chapters 11 -13

 

March 28:        Capital Budgeting and Debt Administration.

 

                        Readings:  Mikesell:  Chapter 5 (review) and 14.

                                                Handout:             Petersen,  “ Debt and Debt Management”

                                                                       

 

April 5:             Cash Management, Investments and Public Employee Pensions. 

                       

                        Mikesell: Chapter 15

                        Handout: Petersen, "Investing Public Funds"

 

           

April 11:           Research Paper Due: No Class

                       

                       

April 18:           Local Economies, Fiscal Capacity and Fiscal Impacts.

                        Handouts:  Petersen. “Value Capture Finance”

                                           Burchell & Listokin, "Fiscal Impact Procedures."

 

                                               

April 25:           Analyzing Fiscal and Financial Condition:  Tying it all together

                                                Handouts:            An Official Statement to be provided                                                                                     Standard & Poor’s Corporation Public Finance Criteria

 

May 2:             Fiscal Reform at the State Level:

                        Readings:   Commission on Virginia’s State and local Tax Structure

                                DC Comparative State and Local Tax Burdens

                          

May 9:                                      FINAL EXAM (Regular class time)


[1] Where letter or numeric grades are used, the following is the sequence:

A+: 98-100, A: 92-97.9 A-: 90-91.9     B+: 88-89.9, B: 82-87.9,  B-: 80-81.9    C+: 78- 79.9. C: 72-77.9, C-: 70-71.9