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Texas Politics - Political Economy
  Key Words and Phrases

ad valorem tax
Ad valorem is Latin for according to the value. In general, an ad valorem tax is a tax imposed at a percentage rate of value based on price (e.g., a sales tax or value added tax) or based on assessed value (e.g., a property tax, inheritance tax, or import tariff). In Texas and in other U.S. jurisdictions, the term typically is used as a synonyn for property taxes which are the major source of revenues for state and municipal governments. The alternative to ad valorem taxation is a tax expressed as a fixed amount, where the tax base is the quantity of something, regardless of its price or value. Gasoline, alcohol, cigarette, and other excise taxes as well as licenses and fees, for example, are usually calculated on the quantity sold, not the sale price or value.
budget execution authority
Authority granted the governor and the Legislative Budget Board to make transfers of appropriations between agencies and items within the adopted budget
Children's Health Insurance Program (CHIP)
The Children's Health Insurance Program (CHIP) is a federal block grant program created by Congress in 1997 to help states provide chlidren's health care to low and moderate income families who earn too much to qualify for Medicaid, but who cannot afford to buy private insurance. States provide matching funds from state revenues to obtain federal dollars according to formulas established by federal law. In 2003 the Texas legislature tightened eligibility requirements for Medicaid and reduced state matching money for the CHIP program to help cover a budget shortfall. Tens of thousands of previously insured or eligible children became ineligible for coverage generating a storm of protest. Funding was partially restored in the 2005 legislative session. For further information, see the CHIP feature in the Bureaucracy chapter
conference committee
A joint committee composed of five members from each chamber appointed by the respective presiding officers to resolve the differences between the House and Senate versions of a measure when the originating chamber refuses to concur in the changes made by the opposite chamber. Upon reaching an agreement, the conferees issue a report that is then considered for approval by both houses.
dedicated fund
A dedicated fund contains government revenues from taxes, fees, licenses, or other sources designated constitutionally, statutorily, or by the requirements of federal law to be spent for specific programs or purposes. For example, in Texas the state collects twenty cents on every gallon of gasoline sold. The Texas constitution requires that seventy-five percent of this revenue must be deposited in the Highway Trust Fund which is dedicated to road and bridge building and maintenance in Texas. The other twenty-five percent must go into the Available School Fund which can be spent only on public education. A significant share of the state's budget in Texas involves spending from dedicated funds.
excise tax
An excise tax is a tax levied by government on the manufacture, sale, or consumption of specific commodities within a country or state. Excise taxes frequently take the form of unit rate taxes (e.g., a per gallon gasoline tax, a per pack cigarette tax), but may take the form of ad valorem taxes. Unlike a general sales tax or a value added tax they are levied only on specific goods. They resemble taxes on privileges which are usually assessed in the form of a fixed license or fee. Excise taxes usually have one of two purposes, either to raise revenue or to discourage particular behavior. Excise taxes such as those on fuel, alcohol and tobacco are often justified on both grounds. Excise taxes can be imposed at the point of production or importation, or at the point of sale. To encourage exports, they are usually waived or refunded on goods being exported, though the importing country may re-impose them.
The term, short for extra-urban, was coined in the 1950s to describe prosperous rural communities beyond the suburbs that, because of highways, were becoming dormitory communities for urban areas. Exurbs have undergone massive growth and middle class diversification since the 1990s. Today, some lie in the outer suburbs of urbanized areas, but most are separated by a few miles of rural, wooded, or agricultural land from the suburbs. Some originate independently of the city to which many residents commute and many of these have their own cultural institutions or colleges. Others lack the historical and cultural traditions of cities and established towns. In either case, contemporary exurbs are filled or filling with typically middle class, politically conservative consumers attracted by cheap land and low taxes who are disconnected from urban life but typically commute to jobs in suburban office parks or even city centers.
fiscal policy
Fiscal policy refers to a government's decisions about taxation, public debt, and spending. National, state, and other governments use fiscal policy not just to pay for government but also to manage the economy and achieve desired economic goals. Under capitalism, goals typically include moderating the ups and downs of business activity, promoting business expansion, stimulating employment, and maintaining stable prices with low inflation. For example, during a business downturn, a government can try to stimulate economic growth by increased spending and/or tax cuts.
An acronym for 'full time equivalent' used for management and reporting purposes to define and track types and total numbers of employees, college students, and other groups that represent claims on an organization's resources. For example, fulltime employees, counted as one FTE each, are typically defined as those who work 40 hours per week. Total FTE employment is then the sum of fulltime workers plus the fractional contributions of other classes of employees.
Good Roads Amendment
Article Eight, section 7-a of the Texas constitution, added with voter approval in 1946, is often called the good roads amendment. It is a leading example of a dedicated fund. It requires that seventy-five percent of state government revenues from motor vehicle registration fees and taxes and from taxes on gasoline and other fuels and lubricants be dedicated to highway construction and maintenance. The other quarter of these revenues must be placed in the Available School Fund to help pay for public education.
line-item veto
The Governor's constitutional power to veto specific items in the legislature's budget bill rather than the whole bill.
The Spanish word maquila originally denoted the share that millers collected for processing grain in colonial Mexico. Maquiladora today usually refers to a typically foreign owned factory located in a Mexican border town such as Ciudad Juarez opposite El Paso, TX where Mexican workers paid much less than U.S. workers assemble duty-free imported parts and materials into more finished products for duty-free export to the United States. To create jobs, Mexico has encouraged such trans-border operations and today thousands operate along the U.S./Mexico border. Because of Mexico's different, typically more lax, labor and environmental standards maquiladoras have raised many concerns about working conditions, worker health, and environmental problems.
mark up
The process of making substantive changes and editorial corrections to a bill. Much of this work is carried out in committee and subcommittee meetings.
North American Free Trade Agreement (NAFTA)
Under U.S. law NAFTA is a congressional-executive agreement much like a treaty which created a sphere of free trade between Canada, Mexico, and the United States. It went into effect in 1994. NAFTA eliminated or began the phase-out of duties on U.S. goods shipped to Mexico; it protected intellectual property rights; and it provided for removal of other restrictions on transnational trade and investment. It met strong opposition from unions, environmental groups, and others in all three countries when it was ratified, though it does include some supplemental agreements intended to provide some worker and environmental protection.
progressive tax
A progressive tax, also called a graduated tax, takes a larger percentage of income from those with larger incomes. The term progressive refers to the way the tax rate progresses from low rates for low incomes to high rates for high incomes. Progressive taxes are usually implemented as income taxes. The federal income tax system is an example since people with more income pay a higher percentage of it in taxes. The opposite of a progressive tax is a regressive tax.
regressive tax
A regressive tax is one in which the proportion of one's income that one pays in taxes is larger for people with lower incomes. Regressive taxes tend to be more burdensome on lower-income individuals than on higher-income individuals and corporations. While income taxes tend to be more progressive, many widely used types of taxes tend to be regressive in practice. For example, most sales and common excise taxes are regressive since lower income people spend larger portions of their income on taxed items. Social security taxes arguably are regressive because they exclude income above a certain level as well as interest, rent, and other kinds of income common for the affluent. The opposite of a regressive tax is a progressive tax.
sunset review
Sunset review is a tool legislatures can use to hold parts of the executive branch accountable. The Texas sunset law is one of the most expansive and actively used in the United States. State laws vary, but typically as in Texas the legislation authorizing an agency or program contains an automatic termination clause or expiration date. Agencies about to expire must pass legislative review to continue, though few are actually terminated. Sunset review is more frequently a tool for legislative oversight used to make changes to executive branch agencies.
zero-sum game
A zero-sum game describes any situation in which a participant's gain (or loss) is exactly balanced by the losses (or gains) of the other participant(s). It is so named because when the total gains of the participants are added and total losses are subtracted the net sum representing total gain or loss is zero. Cutting a cake can create a zero-sum situation. For example, when the cake cutter also chooses the first piece, the cake cutter has an incentive to take the largest piece thus reducing the amount of cake available for others. The cake cutter's gain is offset by the other cake eaters' losses. In contrast, a positive-sum game results in some participants losing and some gaining with an overall gain. A negative-sum game results in some losing and some gaining with an overall loss.

Texas Politics:
© 2009, Liberal Arts Instructional Technology Services
University of Texas at Austin
3rd Edition - Revision 117