Off-budget enterprise
Encyclopedia
Off-budget enterprises are a type of government
in the United States
, the UK
and the EU. OBEs use public funds to further public (as in education) or private (as in economic revitalization) interests. Regulated by various state and federal laws, they operate outside the regulations for general-purpose government
and public scrutiny, although many states have created oversight authorities of one form or another. They achieve self-funding by usually having tax
ation authority or fund themselves through fees for services rendered. Some have the ability to raise revenue bonds. The fastest-growing OBE is the industrial development agency which issues tax-exempt
industrial revenue bond
s to finance private business ventures mainly to revitalize economically depressed areas. Many are formed to deal with special local situations. The most common OBE is the School district
.
In 1962 there were 18,323 OBEs and in 1998 there were nearly 30,000. Some OBEs receive funding from the federal government in the form of block grant
s.
and David R. Morgan
state, "Through OBEs, Detroit
is now dominated by business elites."
Within the EU, accusations have been made that off-budget enterprises are sometimes used by national governments to circumvent the Stability and Growth Pact
, as public debt will no longer appear in the annual budget deficit and in total public debt, which may not exceed certain percentages of GDP
(3% and 60% respectively) under the Maastricht criteria. During the past years, there have been various disputes between the European Commission
and national governments on the classification of such enterprises.
Government
Government refers to the legislators, administrators, and arbitrators in the administrative bureaucracy who control a state at a given time, and to the system of government by which they are organized...
in the United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
, the UK
United Kingdom
The United Kingdom of Great Britain and Northern IrelandIn the United Kingdom and Dependencies, other languages have been officially recognised as legitimate autochthonous languages under the European Charter for Regional or Minority Languages...
and the EU. OBEs use public funds to further public (as in education) or private (as in economic revitalization) interests. Regulated by various state and federal laws, they operate outside the regulations for general-purpose government
Municipality
A municipality is essentially an urban administrative division having corporate status and usually powers of self-government. It can also be used to mean the governing body of a municipality. A municipality is a general-purpose administrative subdivision, as opposed to a special-purpose district...
and public scrutiny, although many states have created oversight authorities of one form or another. They achieve self-funding by usually having tax
Tax
To tax is to impose a financial charge or other levy upon a taxpayer by a state or the functional equivalent of a state such that failure to pay is punishable by law. Taxes are also imposed by many subnational entities...
ation authority or fund themselves through fees for services rendered. Some have the ability to raise revenue bonds. The fastest-growing OBE is the industrial development agency which issues tax-exempt
Tax
To tax is to impose a financial charge or other levy upon a taxpayer by a state or the functional equivalent of a state such that failure to pay is punishable by law. Taxes are also imposed by many subnational entities...
industrial revenue bond
Industrial revenue bond
An industrial revenue bond is a unique type of revenue bond organized by a state or local government. The bond issue is sponsored by a government entity but the proceeds are directed to a private, for-profit business.-Bond Structure:...
s to finance private business ventures mainly to revitalize economically depressed areas. Many are formed to deal with special local situations. The most common OBE is the School district
School district
School districts are a form of special-purpose district which serves to operate the local public primary and secondary schools.-United States:...
.
In 1962 there were 18,323 OBEs and in 1998 there were nearly 30,000. Some OBEs receive funding from the federal government in the form of block grant
Block grant
In a fiscal federal form of government, a block grant is a large sum of money granted by the national government to a regional government with only general provisions as to the way it is to be spent...
s.
Examples
- AMTRAKAmtrakThe National Railroad Passenger Corporation, doing business as Amtrak , is a government-owned corporation that was organized on May 1, 1971, to provide intercity passenger train service in the United States. "Amtrak" is a portmanteau of the words "America" and "track". It is headquartered at Union...
- Tennessee Valley AuthorityTennessee Valley AuthorityThe Tennessee Valley Authority is a federally owned corporation in the United States created by congressional charter in May 1933 to provide navigation, flood control, electricity generation, fertilizer manufacturing, and economic development in the Tennessee Valley, a region particularly affected...
(TVA) - US Postal Service
- School districtSchool districtSchool districts are a form of special-purpose district which serves to operate the local public primary and secondary schools.-United States:...
- Port AuthorityPort authorityIn Canada and the United States a port authority is a governmental or quasi-governmental public authority for a special-purpose district usually formed by a legislative body to operate ports and other transportation infrastructure.Port authorities are usually governed by boards or...
- UKAEA
- SovkhozSovkhozA sovkhoz , typically translated as state farm, is a state-owned farm. The term originated in the Soviet Union, hence the name. The term is still in use in some post-Soviet states, e.g., Russia and Belarus. It is usually contrasted with kolkhoz, which is a collective-owned farm...
Criticism
Political scientists Robert E. EnglandRobert E. England
Robert E. England is a Professor of Political Science at Oklahoma State University. He is a former graduate student of David R. Morgan.England is currently the Editor of International Fire Service Journal of Leadership and Management and an Editorial Board member for the Journal of Social...
and David R. Morgan
David R. Morgan
David R. Morgan is a retired professor of political science at the University of Oklahoma where he where he was the Henry Bellmon Chair of Public Service.Morgan served two years as the first city manager of Yukon, Oklahoma....
state, "Through OBEs, Detroit
Detroit, Michigan
Detroit is the major city among the primary cultural, financial, and transportation centers in the Metro Detroit area, a region of 5.2 million people. As the seat of Wayne County, the city of Detroit is the largest city in the U.S. state of Michigan and serves as a major port on the Detroit River...
is now dominated by business elites."
Within the EU, accusations have been made that off-budget enterprises are sometimes used by national governments to circumvent the Stability and Growth Pact
Stability and Growth Pact
The Stability and Growth Pact is an agreement among the 27 Member states of the European Union that take part in the Eurozone, to facilitate and maintain the stability of the Economic and Monetary Union...
, as public debt will no longer appear in the annual budget deficit and in total public debt, which may not exceed certain percentages of GDP
Gross domestic product
Gross domestic product refers to the market value of all final goods and services produced within a country in a given period. GDP per capita is often considered an indicator of a country's standard of living....
(3% and 60% respectively) under the Maastricht criteria. During the past years, there have been various disputes between the European Commission
European Commission
The European Commission is the executive body of the European Union. The body is responsible for proposing legislation, implementing decisions, upholding the Union's treaties and the general day-to-day running of the Union....
and national governments on the classification of such enterprises.
See also
- Political sciencePolitical sciencePolitical Science is a social science discipline concerned with the study of the state, government and politics. Aristotle defined it as the study of the state. It deals extensively with the theory and practice of politics, and the analysis of political systems and political behavior...
- Quasi-autonomous non-government organisation - A UK definition
- Special-purpose districtSpecial-purpose districtSpecial-purpose districts or special district governments in the United States are independent governmental units that exist separately from, and with substantial administrative and fiscal independence from, general purpose local governments such as county, municipal, and township governments. As...
- Municipal Authority
- AuthorityAuthorityThe word Authority is derived mainly from the Latin word auctoritas, meaning invention, advice, opinion, influence, or command. In English, the word 'authority' can be used to mean power given by the state or by academic knowledge of an area .-Authority in Philosophy:In...
- The agency - Government monopolyGovernment monopolyIn economics, a government monopoly is a form of coercive monopoly in which a government agency or government corporation is the sole provider of a particular good or service and competition is prohibited by law...
- Fiscal policyFiscal policyIn economics and political science, fiscal policy is the use of government expenditure and revenue collection to influence the economy....
- Government-owned corporationGovernment-owned corporationA government-owned corporation, state-owned company, state-owned entity, state enterprise, publicly owned corporation, government business enterprise, or parastatal is a legal entity created by a government to undertake commercial activities on behalf of an owner government...
- Public corporation
- Crown corporation