desertEagle wrote:
Bunuel wrote:
The administrative budget in the Central Valley school district is proportional to the value of the valley’s property tax base, the chief source of funding for the school district. As revenue from property taxes increases, each budget segment of the school district is increased proportionately.
Which of the following statements, if true, is the best basis for a criticism of the Central Valley’s budgeting policy as an economically sound budgeting method for school districts?
(A) The school district might continue to pay for past inefficient allocation of funds.
(B) The revenue from property taxes has remained relatively unchanged for the last decade.
(C) Student performance is affected by fluctuations in the overall school district budget.
(D) Many Central Valley taxpayers have complained about the high property tax rates in the area.
(E) The current budgeting system has little impact on whether parents decide to take their children to non-district funded classes.
Argument
Budget proportional to tax base. So, increase in tax means increase in budget segment.
Question Type
Find Flaw --> what if tax base decrease or remain same? then there will be no increase in budget
(A) The school district might continue to pay for past inefficient allocation of funds. -->
whats in past does not guarantee future --> INCORRECT(B) The revenue from property taxes has remained relatively unchanged for the last decade. -->
tax remains same implies no increase in budget --> CORRECT(C) Student performance is affected by fluctuations in the overall school district budget. -->
student performance does not have any bearing on the plan --> OUT OF SCOPE --> INCORRECT(D) Many Central Valley taxpayers have complained about the high property tax rates in the area. -->
complain does not have any bearing on plan --> OUT OF SCOPE --> INCORRECT(E) The current budgeting system has little impact on whether parents decide to take their children to non-district funded classes. -->
OUT OF SCOPE --> INCORRECTHi
desertEagle, I agree with B as the answer to this question, however, I have a different reasoning.
The question asks us to identify a criticism, a statement that essentially says that the budegting policy in discussion is not an economically sound method for the aforesaid school district.
What I think is that, the problem is the administrative budget being directly proportional to the revenue numbers. It wouldn't be a problem if the revenue numbers were/are increasing and the administrative budget too increased alongwith it, however given the fact that revenue numbers HAVE NOT increased over the past 10 years I can safely assume that my administrative budget too has not seen an increase in the last 10 years, and this is problematic, and calls into question the budgeting policy, and acts as a criticism.
If the revenue numbers have not increased, you have still somehow got to increase the administrative budget some way to keep up with the increasing costs, and that too when you're talking about a 10 year period.
Imagine if property taxation fetched me $1000 in the year 2000 and I gave you a $100 to work out your administrative expenses, you would still be able to fairly manage, but imagine it's the year 2010, and the property taxation still fetches $1000, would you be happy with the $100 budget to work out your administrative expenses? I assume not. Your costs would have dramatically shot in those 10 years and you would ask me to give you an increased budget, and arrange for that money some way or the other, whether I borrow that money on a loan or I cut budgets on other things, I've got to figure out a way, because as it stands it's a bad budgeting policy to still make you work with those $100.
What do you think? Does this sound sensible? Let me know!
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