A major challenge faced by public sector budgeters is estimating anticipated revenues for the following and subsequent years.

List three techniques they can employ to estimate future revenues.

What outcomes does government face if it underestimates future revenues?

What outcomes does government face if it overestimates future revenues?

List three common sources of poor revenue estimates.

What courses of action can government officials follow if revenue flows fall short of expenditures? (Identify at least three.)

Budget deficits can have major impacts on government operations at the level of state and local governments. However, the consequences of budget deficits are far less severe at the Federal level. Why?

What role does politics play in establishing budgets? How can this contribute to budgetary instability?