# Budget Provision

The definition of ‘financial opportunities’

Financial capacity in the economy, is the ability of the government, groups, institutions, etc. to generate revenue. Fiscal capacity of governments depends on many factors, including industrial capacity, natural resources and personal income.

Breaking down the ‘financial opportunities’

When governments develop their fiscal policy, definition of financial capacity is an important step. Identify the tax potential of governments gives a good overview of the various programs and services they can provide to their citizens. It also helps governments to determine the tax rate, it is necessary to provide a certain level of programs. The theory of fiscal capacity can also be used by other groups, such as the school district that must determine what they can provide for their students.

Example Budget Provision

Initiative school Finance Colorado, for example, looked at the fiscal capacity of the state school districts in 2016, and found significant differences in what each can collect through taxes, noting that the districts have no control of what one mill can raise. The cost of a mill is the amount of tax payable per dollar of the appraised value of the property. The cost of the windmill is based on “mills”. It is a measure representing the sum of \$1000 of the appraised value of the property, which is used to calculate the amount of property tax.

In Colorado, 1 mill raises less than the minimum of \$4000 to more than \$13 million. The average dollar raised by 1 mill of about \$500 000.
The median is 110000\$. One mill per student low occurs less than 20 \$to over 3000\$. The average dollars per student raised by 1 mill is about 280\$ and the average is about 130\$.

“The amount will increase by 1 mill” checks how much the district can raise the levy 1 mill of assessed value. The average amount involved is \$578,590 with a median of \$111,054 and range from \$3,842 to \$13,221,694. From the point of view of budgetary security, the school district with the highest budget provision can increase taxes by 1 mill and generate 13.2 million\$, and the lowest potential of the district can only generate \$3,842 from the same turn.

Of course, the larger districts have more students and taxpayers to cover larger bills. Note that in Colorado, to help equalize school funding, the state pays two-thirds of school district costs cities pay the rest.

The fact that the financial potential is vital for the government from the point of view of ensuring their residents.