State Government Policy

1. Regulation of Businesses

• What is an example of a government regulation that applies to a business?

• Why do we depend on the government to regulate businesses?

State Regulation of Businesses

The state regulates monetary policy• Limits interest rates that banks can charge• Limits insurance rates (car, renter, home owner)

Regulates public utilities (necessities)• If a company wants to provide a service in a state,

they must abide by the state’s regulations• Consumer protection

Issues professional licenses and exams• Doctors, lawyers, teachers, drivers

2. Consumer Protection

• Whose job is it?

• The state regulates all kinds of things:– Interest charges on credit cards– Auto repair estimates– Landlord-tenant relations– Home repair costs

• Why does the state bother?

3. Worker Protection

• Worker’s compensation–Payments to people who are unable to work due to a work-related

injury

• Unemployment –Workers who lose jobs unexpectedly

• What is problematic in this picture?• Hint: look at the sky

4. Environmental Regulation• Why does the state bother to regulate the environment?

BBC News Nov. 23, 2010: Tehran schools closed due to smog. Tehran is believed to be one of most polluted cities in

the world.

“All schools and nurseries in the Iranian capital, Tehran, have been closed for two days because air pollution has reached dangerous levels.”

How does the state government regulate pollution?

Develop waste management systems

Large corporations submit reports on the likely

effect of their industry on the environment

Companies must obtain permits for air or water pollution or install anti-

pollution devices

Pollution standards are set to reduce

greenhouse gas emissions

How does the government care for the environment?

Regulation of land use

and natural

resources

•Lakes, rivers, streams

•Land, forests, parks

•Oil, natural gas, energy sources

•Wildlife protection and hunting regulation

5. State Justice System• The state has a criminal code that gives local

authorities powers to make some laws but not others

• States set their own system of punishments– Ex: Mandatory sentencing in drug-related crimes or

victim compensation• Correctional System: state prisons, county and

municipal jails, detention centers– State spending on corrections has increased more

each year than highway, education, hospital or public welfare systems

6. Education and the State

• The state contributes some money to public schools and local governments distribute the rest

• The state mandates standardized testing (CSAP), number of years students must attend school, graduation requirements, minimum teacher salaries, etc.

7. The State and Low-Income Residents

Medicaid- medical support for low-income elderly people, low-income families, and the visually

and physically impaired

Funded by both national and state governments

Welfare programs attempt to provide

a temporary remedy

Unemploy- ment

Food stamps

8. Taxes

Tax goods that go in and out of the state or country (imports and exports)

Tax federal property

Use taxing power to deprive people of “equal protection of the law” or life, liberty or property

without “due process”

According to the US Constitution, state and local government

CANNOT:

Sales Tax

General: household items, cars, clothing,

etc.

Selective/excise: cigarettes, liquor, gas,

etc.

Income Tax

Progressive tax: percentage rises as

income rises

Proportional tax: taxes are same rate

regardless of income (ex: fixed 10%)

Other Sources of Revenue

• Motor vehicle registration

• Lotteries• Traffic tickets and parking fees

• Federal money makes up 20% of state revenue– Grants for a specific

purpose

• Borrowing for long-term construction or building projects– Selling bonds– Often voters have to

approve new bond issues

AssignmentPage 674

• Compare the pie graphs and discuss the major differences at your table between state and local expenditures.

• What do you think accounts for these differences?

Page 676

• Read about eminent domain and answer questions 1-3 about the case.

• As a group, discuss the “You Be the Judge” topics